Source: EURLEX
Language: en
Format: md

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COI\NISSION OF THE EUROPEAN COI\NUNITIES

COM(94)145 f lnal

Brussels, 27.04.1994

(presented by the Commission>

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**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 Resolution [1 ] on -the Review of the

situation in the telecommunications sector and the need for further development in that market.

This Resolution set the future agenda for_ the evolution of telecommunications in the European

Union. It identified as a major goal the development of future poliGy in the field of mobile and

personal communications, "to which the publication of a Green Paper on mobile

communications will contribute".

Mobile communications has developed over recent years into a key area of growth in the Union.

With the broadening of mobile communications into general personal communications, the

sector will, before the end of the decade, substantially affect the lives of every citizen of the

European Union.

In the light of the potential mass market for personal communications, a coherent policy

framework for the sector and for the development of trans-European networks must now be

promoted within the context of the Union's global strategy on growth, competitivity and

employment.

Such a framework can only result from broad consultation of all parties concerned.

This Green Paper is intended to launch an active discussion involving th:;; Council of the

European Union and the European Parliament; the Economic and Social Committee and the

Committee of Regions ; consumers and business users ; fixed and mobile network operators,

and service providers ; manufacturers of mobile equipment, fixed network equipment, data

processing and multimedia technologi,es ; together with the trade unions and other organisations

representing the social interests in the sector, and bodies in the area of data protection and

pnvacy.

Council Resolution of 22nd July 1993 on the review of the situation m the telecommunications sector and the need for further developm..:nt m that market
(93/C 213/01, OJ C213, 6.8 93)

3

**I** **INTRODUCTION**

Mobile communications is currently the fastest growing area within the telecommunications

sector. Over the last few years it has experienced unprecedented growth in subscriber numbers,

especially in cellular mobile telephony. Europe has now more than 8 million cellular mobile

telephony users, over double the number of three years ago. There are also more than 8 million

users of other mobile communications services, in particular, paging and so-called private
mobile radio systems. It is forecast that by the year 2000, there could be nearly 40 million users

in the European Union, and with the growing expansion into personal communications services

(PCS), up to 80 million users by the year 2010.

The market is being driven by rapid advances in technology, by commercial opportunities and by

falling prices. Subscriber growth rates during the last few years in Member States with high

growth cellular telephony markets (car telephones and hand-held portables) have varied from 30

to 40%. Recent analysis shows that this trend is withstanding the current economic recession.

Society as a whole can benefit from individuals being contactable from any location, and while

on the move. The need for mobile communications is becoming a normal part of business life

with users ranging from the multinational executive to the local plumber or builder. Over the

next few years, as prices continue to fall, and as the latest technologies become well established,
mobile communications are expected to make significant inroads into the mass consumer

market.

The market potential for personal communications services is huge. While the maximum ~ensity

for fixed wireline telephones is not expected to exceed substantially an average penetration of

some 50% of the population, (i.e. approximately one connection per household, plus business

use), personal communications penetration has the ultimate potential to reach near 80% of the

population (i.e. up to one connection per adult).

The growth of mobile communications will have a significant impact on the whole of the

telecommunications industry. Mobile services themselves will continue to experience rapid

growth, both in terms of subscriber numbers and corresponding traffic. This growth will in turn

stimulate traffic over the fixed networks, \.\-ith mobile networks continuing to deliver much of

their traffic volumes to the fixed network, thereby increasing the overall use of

telecommunications.

Mobility has a particular significance in the broader context of the European Union. On the one

hand, mobility is at the very heart of the objective of the Union for the free movement of goods,

people, services, and capital. On the other hand, the prospect of European-wide advanced

mobile communications services, will support the commercial success of these services on the

mass market.

4

With the pan-European digital mobile system, GSM, the European Union has established a

world-leading technology in this key area of the future global communications market. The

Union must now build on this success.

- Mobile communications also has an important role to play in stimulating massive private and
public investment into telecommunications networks and services, and in contributing to
maintaining and developing service in the less developed or peripheral regions of the Union.

While the Green Paper on the development of the Common Market for telecommunications
services and equipment of 1987 [2 ] (the 1987 Green Paper) set mobile communications to one side

for further consideration, the Union has already undertaken specific action in the field of mobile

communications within the overall context of its telecommunications policy. This has been a

major factor in European success and leadership in digital mobile technologies.

With the expansion of mobile communications into the future personal communications market,
a coherent policy framework for the s«~ctor must now be developed.

It is now opportune to consider the: full extension, and where necessary, adaptation of the
telecommunications policy of the Union to the area of mobile and personal communications

networks and services.

The purpose of this Green Paper is to identify basic principles and action lines for discussion.

These are aimed at expanding the opportunities for the sector at a critical moment in its

development.

The process must build on the achievements that have been made within the context of the
Union's telecommunications policy to create a strategy for the European communications
market. The global aims of the positions and proposals in this paper are :

~ to permit the development of a Union-wide market for mobile services, equipment, and

terminals~

~ to identify common principles where required, for achieving this objective, in relation to
the provision of mobile infrastructure, the development of mobile networks and services,
and the supply and operation of mobile terminals ~

~ to promote the evolution of the mobile communications market into mass personal
communications services, with particular emphasis on pan-European services ~

2 Green Paper on the Development of the Common Market for Telecommunications Services and Equipment (COM(87)290 final, 30.6.1987)

5

~ to facilitate and promote the emergence of trans-European networks and services in the
sector, and to ensure that the sector's development is achieved in a manner consistent

with the public interest.

The proposals take into account existing and planned services, technological capability, user

demand and the existing regulatory framework in the Member States. They build on the
continuing growth of mobile services, whilst at the same time establishing a framework for the
introduction of new services and networks ~ for greater user choice ~ free development of
markets and the elimination of existing constraints ; promotion of trans-European networks and
services, and full development of the world-wide potential of Europe's mobile sector.

This Green Paper addresses a sector which is undergoing explosive growth and which therefore
now needs a common vision as a matter of utmost urgency. It should be seen against the
general background set by the White Paper on growth, competitiveness and employment for the
future development of the information society in the European Union. It represents a major step

within the global phased approach to the telecommunications sector set by the Council

Resolution of 22nd July 1993 for the future balanced relationship of fixed and mobile networks
and services in the Union and for the maintenance and furthering of univer~al service in the
sector for the European citizen.

6

II THE APPROACH CHOSEN

The working out of a consistent approach for the Union with regard to mobile and personal

communications must be seen against the background of overall policy objectives. The

European Union's policy in this sector should :

~ be based on the recognition of the major market and technology trends which are having

a dramatic effect on an already innovative sector. These trends are found in both the

Union and world-wide, in particular, in the United States and the Pacific area.;

~ build on the policies of the Member States to date which have led m most Member

States to a substantially more open and competitive environment ;

~ extend the basic principles of the Union's telecommunications policy and Community

law, in particular the balance achieved between liberalisation and harmonisation, to

mobile communications ~

~ take full account of the wider international dimension and the existing framework for

cooperation which has developed in the sector reaching beyond the European Union.

~ develop further the internal market in this area, as the basis for a strong negotiating

position in the bilateral and multi-lateral framework aimed at achieving equivalent and

comparable market access in third countries.

These five objectives have determined the approach taken by the Commission in developing the

positions and proposals set out for consultation and discussion in this Green Paper.

The Commission has undertaken substantial analysis within its own services, as well as
requesting external studies. As regards the latter, four major studies [3 ] have been carried out for
the Commission, and presented and discussed in public workshops [4] .

The studies were concentrated on the areas most critical for future policy formulation, in

particular, future market and technology conditions to the end of the decade and beyond, to the

3 "Scenano l\fobile comm um cations _20_ I 0 study on forecast developmert on future trends and technical development and commercial prov1s1on up to the year
2010", Report to tht: Commission of the European Communities, prepare.d by EUTELIS Consult, Ratingen, Germany, October i993,
"Licensing and declaration procedures for mobile communications in Member States of the European Community". Report to the Commiss10n of the European
Communities prepared by Stanbrook & Hooper and t;PMG Peat Marwick, August 1993 ;
"Study on analysis of new methods of frequency allocation in the Member States and comparative analysis of recent developments m this field", Repr,rt to the
Commission of the European Communities prepared by Coopers & Lybrand, July 1993;
"Study on the application of Open Network Provision to mobile telephony, data networks, and paging services", Report to the Commission of the European
Communities prepared by PA Consulting Group, November 1992.
-l Workshops were held on these studies in November 1992 and September 1993. Both workshops were attended by a broad spectrum of representatives of the
different interests in the sector, m particular, representatives of fixed and mobile network operators, service providers, manufacturers, and users. The
Commission also received a number of wntten statements and comments corcemmg the studies, as well as related statements of a more general natur•~.

7

year 20 I 0, current licensing and radio frequency allocation procedures for mobile systems in the

Member States and future requirements in this field, as well as interface and interconnection

issues between different systems and services and analysis of the application of the Open

Network Provision framework to these issues.

The studies should be considered part of the consultation process and will be made available on

request.

In parallel, the Commission has examined reports and comments forwarded by major

organisations representing a variety of interests which were prepared with a view to contributing
to the Green Paper [5] . The Commission also considered reports established in a national context,
often based on national consultation and/or extensive hearings [6] .

The Commission also received during the preparation period a substantial number of comments

by mobile network operators, fixed network operators, service providers, and users which drew

attention to specific issues involved.

These contributions have considerably assisted the Commission in its preparation of fois Green

Paper.

As regards extension of the principles of the Union's telecommunications policy to the sector,
account must be taken of the substantial body of European Community law which is already in

place, primarily, Directives and Decisions, in addition to positions represented by Resolutions,

and Recommendations, but also the principles in the Treaty establishing the European
Community ("the Treaty").

5 Reports were f01warded, mter aha, by the following organisations

European Committee for Telecommunications Regulatory Affairs (ECTRA), "Review of the reyuirements for the future hannonisat1un of regulatory pohc\'
regarding mobile communications services", report by ECTRA Mobile Project Team, October I 993     
European Telecommunications and Professional Electromcs Industry (ECTEL ). "An ECTEL contribution for the preparat10n of a CEC llreen Paper on l\!obile
Communications", May 1991 .
European Free Trade As«ociation (EFTA). "Considerations and proposals concerning a Green Paper on Mobile Communications". mtenm workmg group on free
movements of servi1.:es and capital :
Furthermore, a number of repo'1s were submitted by nat10nal assocations and individual comparnes.
6 Direction de la Regleme:Jtation Generale (DRG), "Les telecommunications a !'age de la mobilite. con:;ultat10n publique sur l'introductwn en France des systemcs
de communications personnelle.s", November 1992 .

Committee of experts _on_ basic frequency regulation matters and civil telecommunications for BMPT. "Frequency regulation in the Federal Republic of
Germany", June 1991 .
Department of Trade and Industry, "Phones on the move", 1989
Furthermore, a number of publications by National Regulatory Authorities. regarding in particular lacensmg procedures and calls for tendermg t(1r licenses were
studied

8

**These** **positions** **include** **Recommendations** **on** **the** **development** **of** **key** **mobile** **systems** **such** **as**
**the** **pan-European** **digital** **mobile** **system** **(GSM** **the** **Global** **System** **for** **Mobile**
**communications),** **the** **new** **digital** **cordless** **system** **(DECT** **-** **Digital** **European** **Cordless**
**Telecommunications),** **and** **the** **digital** **Europe-wide** **paging** **system** **(ERMES,** **the** **Pan-European**
**Digital** **Paging** **System)** **[7 ]** **and** **the** **related** **Frequency** **Directives** **[8]** **,** **as** **well** **as** **Decisions** **in** **fields** **of**
**direct** **relevance** **to** **the** **future** **development** **of** **mobile** **communications,** **such** **as** **in** **numbering** **[9 ]** **.**

**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**
**development** **of** **a** **common** **market** **in** **telecommunications** **services** **and** **equipment.** **L** **This**
**framework** **has** **developed** **on** **the** **basis** **of** **the** **1987** **Green** **Paper,** **the** **Green** **Paper** **on** **satellite**
**communications** **of** **1990,** **and** **the** **Telecommunications** **Review** **concluded** **in** **April** **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 Council Recommendation of 25th June 1987 on the coordinated introduction of public pan-European cellular digital land-based mobile communications in the
Community (87/371/EEC; OJ Ll96/81, 17.7.87)- concerning introduction of the GSM system;
Council Recommendation of 9th October 1990 on the coordinated introduction of pan-European land-based public radio paging in the Community (90/543/EEC ;
OJ L310/23, 9.11.90) - concerning introduction of the ER.NIBS system;
Council Recommendation of 3rd June 1991 on the coordinated introduction of digital European cordless telecommunications (DECT) into the Community

(91/288/EEC; OJ Ll<W47, 8.6.91).
**8** Council Directive of 25th June 1987 on the frequency bands to be reserved for the coordinated introduction of public pan-European cellular digital land-based
mobile communications in the European Community (87/372/EEC; OJ Ll96/85, 17.7.87)- the frequency designation for the GSM system;
Council Directive of 9th October 1990 on the frequency b~mds designated for the coordinated introduction of pan-European land-based public radio paging in the
European Community (90/544/EEC ; OJ L3 l 0/28, 9.11.90) - the frequency designation for the ERMES system ;

Council Directive of 3rd June 1991 on the frequency bands to be designated for the coordinated introduction of digital European cordless telecommunications

(DECT) into the Community (91/287/EEC; OJ Ll44/45, 8.6.1991).
9 Council Decision of 29th July 1991 on the introduction of a single European emergency call number (91/396/EEC; OJ L217/31, 6.8.91),
Council Decision of 11th May 1992 on the introduction of a standard international telephone access code in the Community (92/264/EEC ; OJ L 137121.

20.5.92).
10 Council Resolution of 30th June 1988 on the develc;iment of the common market fortelecommunications services and equipment (88/C257/EEC OJ C257/l,

4.10.88);

Council Resolution of 19th December 1991 on the development of the common market for satellite communications services and equipment (92/C 8/0 I,
OJ C8/l, 14.1.92);

Council Resolution of 22nd July 1993 on the review of the situation in the telecommunicat10ns sector and the need for further development in that market (93/C
213/01, OJ C213/l, 6.8.1993).

**11** See, inter alia, Resolution of the European Parliament on the Commission Communication of 21st October 1992 concerning the 1992 Review of the situation in

the telecommunications services sector, 20.4.1993.

**12** Green Paper on the Development of the Common Market for Telecommunications Services and Equipment (COM(87)290, 30.6.87);
Green Paper on a common approach in the field of satellite communications in the European Community (COM(90)490, 20.11.90) ;

1992 Review of the Situation m the Telecommunications Services Sector (SEC(92)1048 final) and Communication to the Council and European Parliament on

the consultation on the Review of the situation in the telecommunications sector (COM(93)159 final).
**13** Council Resolution of 28th June 1990 on the strengthening of European wide cooperation on radiofrequencies, in particular with regard to services for the panEuropean dimension (90/C 166102; OJ C166/4, 7.7.90); complemented by
Council Resolution of 19th November 1992 on the implementation in the Community of the European Radiocommunications Cornmlltee Dec1s1on
(92/C 318/01. OJ C318tl. 4.12.92).
Council Resoluuon of 19th November 1992 on the promotion of Europe-wide cooperation on numbering oftelecommunicauons services (92/C 318102.
OJ C3 I 8/2, 4.12.92)
**14** Council Resolution of 7th December 1993 on the introduction of satellite personal communications services in the European Community (93/C 339/0 I; OJ C

33911, 16.12.93)

9

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

Directives concerning mutual recognition which identify the procedures for implementing free

circulation of terminal equipment and, according to current proposals, will apply the principle to
licences to provide services [17], as well as Directives concerning the protection of the public
interest in this field, such as the proposed Directive on the protection of privacy [18] .

Finally, the more general environment of the European Union must be taken into account. /

The Treaty on European Union has now added the establishment of Trans-European Networks
as an important objective of the Union.

Title XII, Article l 29b of the EC Treaty indicates that _"within the framework_ _of_ _a system_ _of_
_open_ _and_ _competitive markets, action by the Community shall aim at promoting the_
_interconnection and interoperability_ _of_ _national networks as well as access to such networks"._

The European Union has undertaken substantial action to promote advanced mobile
communications in the framework of its research programmes [19] .

As regards the structure for cooperation in the sector beyond the European Union, key roles are
played in the European context by the European Telecommunications Standards Institute
(ETSI) ; the European Radiocommunications Committee (ERC), and its associated European

Radiocommunications Office (ERO) ; the European Committee for Telecommunications

Regulatory Affairs (ECTRA) and its future associated European Telecommunications Office

(ETO), which are now developing continent-wide coverage, including the countries of Central

and Eastern Europe.

15 Commisison Directive of 16th May 1988 on competition on the markets in telecommunications terminal equipment (88/301/EEC ; OJ L 131/73, 27.5.88)
Commission Directive of 28th June 1990 on competition on the warket~ for telecommunications se1v;ces (90/38FIEEC; OJ L192/l0, 24.7.90)
16 Council Di1.!ctive of2f.tl, June 19<;.'.l on t.:1e estab:ii.hment of the Internal Market for telecommunications services through the implementation of Open Network
Provision (90/387 /EEC ; OJ L 192/1, 24. 7. 90)
Council Directive of 5th June 1992 on the Applicat10n of Open Network Provision to Leased Lines (92/44/EEC; OJ Ll65/27, 19.6.92).
Common position on a Council Directive on the application of Open Network Provision (ONP) to Voice Telephony, I. 7.93.
17 Council Directive of 29th April 1991 on the approximation of the laws of the Member States concerning telecommunications terminal equipment, including the
mutual recognition of their conformity (91/263/EEC; OJ L128/l, 23.5.91),
Council Directive of 29 October 1993 supplementing Directive 911263/EEC in respect of satellite earth stat10n equipment (93197/EEC. OJ L290/01. 24. 11. 93)

for services .

Amended proposal for a Council Directive on the mutual recognition of licences and other nat10nal authorisations for telecommunications services, to be
published;
Proposal for a Council Directive on a policy for the mutual recognition of licences and other national authorisations for the provision of satellite network services
and/or satellite communications services, to be published.
18 Modified proposal for a Council Directive concerning the protection of personal data and privacy in the context of public digital telecommunications networks, m

particular the Integrated Services Digital Network (ISDN) and public digital mobile networks, to be published.
19 See in particular Council Decision of 7th June 1991 adopting a specific research and technological development programme in the field of Communications
technologies (1990 to 1994) (91/352/EEC; OJ L192/8, 16. 7.91) - the RACE programme.

10

With all of these organisations, the Union has - or is in - the process of developing - close
cooperation. Future Union policy in the sector must take full advantage o( the possibilities for
cooperation which such organisations offer within the framework provided by Community law.

As regards the international environment beyond Europe, action there is influencing the

conditions for the future development of the sector in the Union. All Member States have

undertaken major commitments within the framework of the International Telecommunications

Union (ITU), in particular with regard to the International Radio Regulations.

The World Administrative Radio Conference (W ARC'92) held at Torremolinos has led to major

commitments with regard to future availability of radiofrequencies for mobile communications.
This will substantially affect the development of mobile and personal communications in the

Union.

At the same time, the Union is negotiating to achieve, at the international level, a new multinational trading environment in the context of the General Agreement on Tariffs and Trade.

This will also have a major impact on the Union's relations with third countries in the field of

mobile services and equipment.

The approach chosen in this Green Paper has aimed at taking into account this evolving and

complex environment. Results of the analysis have been grouped according to those factors
which represent critical challenges for any approach at a Community l~vel. Detailed
consideration of each of these factors is presented in four anr~exes :

  - Review of technological and market developments **(Annex** A) ;

   - Analysis of the European environment for future development **(Annex B)** ~

  - Review of world-wide developments **(Annex** C);

   - Analysis of the extension of the principles of the Union's telecommunications policy to
the mobile sector **(Annex D).**

The main results are set out in the following chapter.

11

**III MAIN RESULTS OF ANALYSIS AND CONSIDERATIONS TO** **BE**

**TAKEN INTO ACCOUNT**

The main results of the analysis undertaken are summarized below. For detailed explanation of

the various issues, reference should be made to the Annexes and the Glossary of technical terms.

**III.1 Major trends and opportunities.**

I The mobile telecommunications sector represents one of the maJor areas for

potential growth in the communications and information sector.

From the ~tudies undertaken mid-range estimates of the use of mobile

communications in Europe suggest that there could be nearly 40 million users by the
year 2000 and up to 80 million users by 20 I 0 - up from a current total base of
around 16 million users (including cellular telephony, paging and private mobile

radio).

Market research predicts that 20 to 3 0% of the business users can be expected to

have personal mobile communications by the year 2000, with slower penetration
growth thereafter. By 2010 penetration would be 30 to 50%.

In addition, 30 to 40% of the population would have personal communications for

private use by 2010.

With the broadening of mobile communications to full scale personal
communications, penetration levels can ultimately be expected to reach near 80% of
the entire population. Total user numbers could ultimately substantially exceed 200
million in the European Union - compared to a current total subscriber base for
traditional fixed telephony of 153 million.

This makes the future development of mobile and personal communications of key

interest to the Union, both in the context of the development of trans-European

networks and as a central component of the Union's future communications and

information infrastructure.

2 Currently, the overwhelming majority of mobile systems in the Union are still based
on analogue technology, composed of three well established services - so called
**private mobile radio** (for the use of corporate networks - this Paper will describe
this as "own use" - or for the use of closed user groups, e.g. for fleet management,

12

emergency services, taxi-cab services, single businesses, etc.), paging and public
cellular radio services (earphones, mobile phones, etc. ) [20 ] .

The total user base for all mobile services grew over 20 % in 1991, led by an
increase in cellular usage of over 40 %. Despite the general economic downturn,
1992 growth in cellular subscriptions remained strong.

As well as accounting for greater than 45 % of the total user base,, cellular also

accounts for around 90% of the value of the total European market for mobile

services and 75% of that for mobile equipment.

3 Digital technologies are now being introduced in both public and private mobile
radio communications. This will rapidly determine the pattern of development for

the sector.

While the public mobile telephony market is still served mainly by analogue cellular

technologies such as NMT, TA Cs and other systems, the digital technologies now

being introduced, in particular GSM 900 (the European Global System for Mobile

communications), DCS-1800 (so called Personal Communications Networks - PCN

services) and DECT (Digital European Cordless Telecommunications), as well as

systems such as CT2, and ERMES (the pan-European digital paging systems) and

TFTS (the European digital Terrestrial Flight Telecommunications System) will
rapidly overtake analogue systems [21] .

Only one year after its em~ctive launch, GSM accounts for over 10% of the installed

cellular mobile telephony base in the Union.

As regards private mobile radio, new digital technologies such as TETRA (the

European standard for digital trunked systems), mobile data, DSRR (Digital Short
Range Radio), wireless LANs and wireless P ABXs (including use of DECT in this

area) are expected to provide a substantial push in this part of the market.

4 The development of digital mobile systems has been a major success for European
industry, the European standardisation system, in particular, the European
Telecommunications Standards Institute (ETSI), and for European operators. A
number of recently developed European systems are poised to become world

standards. Europe is now considered to be the world leader in digital cellular
systems. GSM has been adopted - or planned to be adopted - in more than 60

20 For definition and technical details see Glossary of Technical Terms
21 For details see Annex A

13

countries, in particular, throughout Europe including the countries of Eastern and
Central Europe, and also in the Pacific Area with the exception of Japan, and in a

number of other countries in Asia, the Middle East and Africa.

European industry has obtained a strong position in both network and terminal

equipment markets in this area, and GSM is having a major impact on ensuring the

world position of the global European telecommunications industry, with a resulting

positive effect on its growth, competitiveness and employment.

At the same time, GSM is overcoming the market fragmentation in the Community

which resulted from the use of incompatible analogue systems in the Member States,

and is developing into a major example of a market-led introduction of a transEuropean 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 show [23], 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 regions2 [4] .

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
pointer [25] .

Tomorrow's communicator will integrate the features of telephone, agenda and

organiser, combined with PC functions. Industry has already introduced very small

PCs ("palm-tops"). Ultimately these devices are likely to integrate all features that

modern telephony offers. This will include video-phone and fax features, as well as

the possibility to "plug" into office or private computers. They will integrate

multimedia and telecommunications applications.

8 The person-to-person calling concept, personal and portable numbers, and the
combination of mobility in both fixed and mobile networks will lead, once such
innovative service combinations are allowed, to a gradual blurring of distinctions

23 See, inter alia,
Eutelis "Scenano Mobile Conununications 2010 - future trends in te~hnological development in commercial prov1s1on up to the year 2010", Repo1t to the
Commission of the European Conununities, October 1993, and
Direction de la Reglementation Generale (DRG) "Les telecommunications a !'age de la mobilite, consultation publique sur !'introduction en France des systemes
de communications personnelles", November 1992
24 See also Council Resolution of 7th December 1993 on the introduction of satellite personal communications services in the European Community (93/C 339/0 I ;
OJC339/l, 1612.93)
25 Such applications are currently mvest1gated interalia in the Conununity R&D programme in the field of telematics (Council Decision 91 /353/EEC, OJ L 192/ 18.
16.7.91) where e.g. on-line traffic data, navigation maps and planning of personal trips are combined on the same mobile commWlication tenninaL In addition,
new services are evolving in markets such as transport, health care, education and training where the use of mobile conununications offer flexibility for new
applications.

15

which now exists between fixed and mobile services, m parallel with the
development of Intelligent Networks. _''Mobile services are then likely_ _to_ _become_
_more integrated with_ _the_ _fixed networks._ _The_ _regulatory regime must therefore_
_make provision for these_ _changes"26._

Personal communication services, allowing person-to-person calling based on a

concept of full mobility will create a completely new telecommunications

environment.

9 Ultimately, personal communications services are likely to be carried most

economically via a single integrated technology concept - the so-called UMTS (the

Universal Mobile Telecommunications System).

The strong European position in digital mobile communications has made the Union

a major actor in the work towards this future "third generation" system, building on
the strengths of the current second generation digital mobile systems.

The Community's programme in advanced telecommunications technologies [27 ]

(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 States [28 ] and Japan, Europe has the opportunity to carry

forward its success in the GSM system into the future third generation market for

personal communications technologies.

26 European Committee for Telecommunications Regulatory Affairs (ECTRA), "Review of the requirements for the future harmomsat10n of regulatory policy
regarding mobile communications services", ECTRA Mobile Project Team, October 1993.
27 Council Decision of7th June 1991 adopting a specific research and technological development programme in the field of communications technologies ( 1990 to
1994), (91/352/EEC; OJ Ll92/8, 16.7.91)
28 See Annex C

16

29

30

**111.2** **Barriers** **to** **be overcome**

10 While Europe has developed a strong position in mobile communications and in the

race towards personal communications services, substantial barriers still remain29.

11 As the majority of Member States are moving towards a competitive environment,

certain Member States continue to maintain exclusive rights in different market

segments which do not allow full scale development of the market, or special rights

which prevent equality of opportunity for all market participants.

12 Systems are generally licenced according to technologies.

On the one hand, this is linked to assignment methods for radiofrequencies and is

justifi~d to a certain extent by the neeu to ensure ~~,.;~tromagnetic compatibility and
efficient use of frequencies. It has also facilitated interoperability and the use of

European standards.

On the other hand, technology-based licensing leads to market fragmentation

between different technollogies and standards, unless sufficient flexibility is allowed

in provision and combination of such services in response to market demand.

13 Current licensing activities are nationally oriented. This results in a web of parallel

national systems in the Union.

While this has the advantage of allowing systems to be fully adjusted to specific

national needs, this focus also leads to substantial delays in the implementation of

pan-European systems. This has been the case even for those systems where this

potential is most obvious. One example is the substantial delays and gaps
experienced in ensuring full-scale roaming in the Union [30 ] within the GSM network.

14 There is no consistent approach in the Member States with regard to service

provision, especially with regard to the activities of independent Service Providers.

Common principles relating to service provision (whether as an integrated part of a

mobile network or by independent service providers), with the aim of facilitating
service provision throughout the Union in line with Article 59 and the Treaty

Competition Rules, could overcome the current effects of both technological and

For a full discussion of cwrent bamers, see the analysis of the cwrent Ew-opean envirorunent m Annexes Band D.
Roaming means the capability to access a mobile commw-11cat10ns system anywhere in the Community, independent of country and the mobile commun1cations
operator over whose network(s) the connection 1s made (such as over the pan-European mobile digital system, GSM), on the basis of a single subscription to a
service provider, usually in the subscriber's home temtory

17

national fragmentation of mobile systems. It could also make a substantial

contribution to the further development of the mobile market.

15 One consequence of the current fragmentated approach to future development and

service provision within the Union is the lack of a common vision on the

development of personal communications services and the ultimate transition to the

Universal Mobile Telecommunications System.

The lack of such vision, insufficient dynamism in the approach to service provision

and failure to adjust to market requirements could jeopardize Europe's current

strong position.

16 This situation is further aggravated by the lack of firm timetables for allocation of

radiofrequencies for new European technologies.

While the Council Directives for the Community-wide designation of frequency

bands for GSM, DECT, and ERMES have charted the pattern of development for

those systems, and while ERC Decisions have been recently adopted concerning

frequency allocation for TFTS and DSRR, major decisions are still outstanding.

This concerns in particular firm agreement and implementation of Europe-wide

frequency bands for DCS-1800, a vital technology for Personal Communications
Services ~ TETRA, a major future technology for private mobile radio, and firm

planning in the Union for the implementation of the frequency bands designated at

W ARC'92 for the UMTS/FPLMTS, which is vital for giving a firm base to the

development of UMTS in Europe.

17 At the same time, the Union to date has not yet found a suitable response to the US

dominated initiatives in satellite-based personal communications.

While the US is lagging behind Europe in the implementation of digital terrestrial

mobile systems, it is now emphasizing satellite-based personal communications as a

major strength and aims to play a dominant role in this global market.

The Council Resolution of 7 December 1993 on the introduction of satellite personal
communications [31 ] calls for determined Community action in this field.

31 C0uncil Resolution or 7th Ikcembcr 199.> l1n the intrnJuet1on llf satellite personal cnmmu111cathll1S ser\'ll"l'S 111 the hirnpean ( \11111m1111l\ 19.• ' • .>.N ()I. ( )J '.
33911, 16.1293)

18

32

18 The general trend in cellular systems is towards micro-cellular systems with cell sizes
down from some 30 kilometres diameter to 10 kilometres and substantially less in

high density urban areas. This has been prompted by technologies such as DCS

1800, as well as commercial and frequency-efficiency needs. This trend will increase

the investment requirements for mobile communications operators by between 2 to 4
times in comparison to traditional cellular ~ystems. However, mobile operators

remain hampered in a number of Member States by restrictions on use of own

infrastructure and/ or use of third party infrastructure, as well as on the sharing of

infrastructure all of which prevents them from improving their efficiency.

At the same time, mobile operators are facing the need to lower tariffs and

restructure prices in order to keep pace as micro-cellular systems move towards the
mass personal communications services market.

I
19 Access to third country markets, in particular, to the United States and Japan,
remains difficult for European manufacturers and operator~, while European

manufacturers buy a major part of their integrated circuits and components for

digital mobile equipment in the U.S. and Japan, and U.S. manufacturers and
operators play a significant role in the European mobile communications market [32 ] .

This imbalance could undermine, in the medium term, the economics of the

European mobile communications sector.

**111.3** **The way forward**

**20.** In analysing the way forward, full account should be taken of the scope and scale of

action required to overcome current barriers impeding the development of a Union

wide market for mobile communications and the gradual transition towards a personal

communications environment.

The further development of such a Union-wide market mobile services and mobile

equipment can allow opt~rators, service providers and manufacturers to achieve

important economies of scale and scope, which will be reflected in improvements in

innovation and services quality and decreasing prices which cannot be easily achieved

on the basis of fragmented national markets. Furthermore, mobile services have by

their very nature, a pan-European vocation which requires co-ordinated action,

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

19

33

34

consistent with Treaty obligations, to provide Union-wide solutions to issues of

standardisation, and frequency and numbering co-ordination; and more broadly to

allow a common regulatory framework to promote the emergence of pan-European

services, operators and service providers.

21. This approach must draw on the basic principles enshrined in the Treaty and, in

particular, Article 3 promoting the further development of the internal market,

together with the fundamental principles of Community law guaranteeing the freedom

of movement of goods (Article 30); the right of establishment (Article 52) and the

free provision of services (Article 59); the competition rules enshrined in Articles 85,

86 and 90; as well as the mechanisms provided under Article 1 OO(a) for

harmonisation measures designed to remove barriers created, for example, by national

regulatory structures or licensing regimes, within the internal market.

The approach also draws on the new political priorities and principles established by

the Treaty on European Union, in particular, the establishment and development on

Trans-European Networks and the fundamental principle of subsidiarity enshrined in

Article 3b.

A full discussion of the extension of the Union's existing telecommunications policy to

mobile and personal communications, which underpins the positions proposed in this

Green Paper, on the basis of these Treaty obligations and Community legal principles

is presented in Annex D.

22 The maintenance of exclusive and special rights is creating a situation which appears
to be incompatible with the Treaty [33 ] and such rights should be abolished.

According to experience, some 95% of all calls transmitted via cellular mobile

communications networks in Europe are calls to terminals connected to the fixed

network or calls originating on the fixed network.

Mobile communications networks are therefore, at this stage, not likely to reduce

nor substitute, but rather substantially increase traffic and revenues on the fixed

network. They therefore cannot undermine the financial viability of the

telecommunications organisations operating the fixed network, nor could they
obstruct the performance of the particular tasks assigned to such operators [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/EEC [35], and the extension of the measures to the satellite

sector [36] .

Essential requirements should concern m particular effective use of the

radiofrequency spectrum and electromagnetic compatibility requirements, as well as

security of network operation, maintenance of network integrity, and, in justified
cases, interoperability of services and data protection ~·and user safety, and safety of

employees.

Conditions based on public service requirements in the form of trade regulations [37 ]

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 licensee [38 ]      

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 competition [39] .

This also implies that license fees must be based on objective facts, be proportionate

and be justifiable.

24 The major condition for the development of the sector and the further development

of the internal market and a fair competitive environment will be overcoming three

35 C omm1ss1t>n D11t:ct1w of 28th June 1990 on competition on the markets for telecommunications services (90/388/EEC ; OJ L 192/10, 24. 7. 90)
( 'ounctl Dm.:ctive of 28th June 1990 on the establishment of the Internal Market for telecommunications services through the implementation of Open Network
l'rov1s1on (90/387/EEC, OJ L 192/J. 24 7 90)
Comn11ss1on Directive of 16th t-.Iay 1988 on the competition m the markets for telecommunications terminal equipment (88/301 /EEC : OJ LI 31 /3, 27.5.88)
Council Dtrcctivc of 29th Apnl 1991 on the approximation of the laws of the Member States concerning telecommunications termmal equipment. including the
mutual n.:cogn1t1nn ofthc1r conformity (91/263/EEC, OJ LI 28/l, 23.5 91)
36 < 'ouncil Dtrective of2~) October 1993 supplementing Directive 91/263/EEC in respect of satcllik earth station equipment (93/97/EEC: OJ L290/0l, 24. 11 93)
Dratl Commission Dm.:ct1vc amending Directives 88/301 /EEC and 90/388/EEC m particular with regard to satellite communications. to be published.
37 Sec Annex D, Section 3 
38 Licensing award procedures should take mto ac.:ount the .ability of potential bidders to comply with trade regulations covenng permanence, availability (including,
for example. speed of network development, compliance with price cap formulas) and quality of service to be contained in the licence to be awarded. The
1dat1w wc1ghtmg of such cntcna must be objectively ba~cd. transparent (1.e published m detail in any call for bids) and respect the pnnciple of proportionality
39 It should, where necessary, provide that a distmct suhsidi,ary should be set up to operate the mobile activity on an arms length basts

21

40

41

42
43

key barriers in the Union: lack of flexibility in service provision, both across licences

and within and between Member States ; conditions concerning the interface

between mobile network operation and the fixed network(s); and the lack of

flexibility in use of own or third party infrastructure, and in sharing of

infrastructure4o.

Overcoming these barriers will not only develop the mobile market, but will also

allow through combined service offerings a major step to be taken towards personal

communications services.

25 Achieving fair interconnection agreements with the fixed network(s) is vital for
mobile operators [41] . Payments to fixed network operators for the conveyance of calls

to their final destination and .the provision of leased lines for the establishment of the

mobile network typically account for 30-50% of total revenue of mobile network

operators. These costs therefore determine to a large extent the economics of

mobile network operation.

The basic framework for such interconnection is established within the Open

Network Provision rules, in particular, the proposed ONP Voice Telephony
Directive [42] .

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 rules [43 ] .

Current positions in Member States vary. Given that a number of Member States

have lifted such restrictions without any visible impact on the revenues of the fixed

network operator(s) or their financial viability, maintenance of such prohibitions

appears difficult to justify.

27 This is particularly true in the case of infrastructure used for direct connections with

other mobile operators, both within and between Member States. This has been

For fwther consideration of these barriers. see Armexes Band D. Sections 3,6 and JO

For full discussion, see Armex D, Section 6.

Common position on a Council Directive on the application of Open Network Provision (ONP) lo Voice Telephony. 1. 7. 93

For full discussion, See Annex D, Section I 0

22

aggravated by the current persistent difficulties for a number of fixed networks in

providing mobile network operators with transmission facilities at reasonable cost or

with the necessary technical facilities (such as control and signalling functions for

roaming between mobile networks and between Member States).

Direct connection could overcome these barriers and accelerate Europe-wide

roaming as well as the establishment of trans-European networks, with a schedule

for such a development to be determined on the basis of the comments received

during the consultation period.

Within this framework such policy should, as identified in Council Resolution

93/C2l3/01, "recognise the need to take into account the objectives of Community

cohesion in the light of the specific circumstances of peripheral regions".

28 The regulation of service provision, as well as attitudes towards independent service

provision vary substantially across Member States.

Diversification and liberalisation of service provision is essential for the future of

European mobile networks, as well as for Europe-wide service provision.

In principle, network operators should meet all reasonable requests by service

providers for access to their services, whether from an independent service provider

or from a service provider integrated into other mobile network operations, within

the limits of normal commercial practice and subject to the provisions of competition

rules.

29 Service provision should not be subject to licencing in the Member States and may

only be subject to a requirement for declaration by Service Providers of their

activities to the National Regulatory Authority(ies) of the Member State(s) where
they choose to operate [44] .

A Code of Conduct for Service Providers should be established on a voluntary basis.

The Code should, in particular, identify measures to safeguard essential requirements

consistent with the Community regulatory framework in this area and commitments

with regard to permanence of service, availability and quality of service, as well as

providing guidelines concerning technical, financial, and commercial practices fully

consistent with the Treaty's competition rules.

h1r lull d1s~uss1nn. sec·,\rule>. J) Scl'lion .>

23

45

46

The Code should also take fully into account the need to attain a high level of

consumer protection.

30 Definition of interfaces is required [45], 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/EEC [46 ] apply to such interfaces.

This implies in particular that, for mobile communications, interconnection

conditions established at these interfaces should be based on objective criteria, be

transparent, and non-discriminatory, cost-oriented, and compatible with the principle

of proportionality, as well as respecting the essential requirements.

The establishment of suitable interconnection agreements respecting these principles

should be primarily a matter for commercial agreement between market participants.

At this stage it does not seem necessary to establish further specific Directives

concerning these interfaces and related interconnection conditions at a Community

level, provided such interconnection is subject to strict supervision by National

Regulatory Authorities to ensure full application of these principles and the

establishment of suitable dispute resolution procedures.

The importance of defining these interfaces to remove obstacles to the development of the internal market and to pronllite pan Eurnpean ser.·1ccs 1s J1s,~usscJ
further in Annexes B and D, Section 6

Council Directive of 28th June 1990 on the establishment of the Internal Market for tclecommun1cations serv11.:es through the 1111plementat11>n nf< >pen Netwnrk
Provision (90/387/EEC . OJ L 19211. _2-+_ 7 90)

24

47

48

49

32 Standards concerning these interfaces should, in general, be voluntary.

In order to facilitate interconnection, the establishment of technical standards

concerning these interfaces should be promoted and published, where required, m

accordance with the provisions of Directive 90/387/EEC.

Only in cases where it is strictly necessary to ensure basic interoperability and
freedom of choice for US(~rs, and subject to the principle of proportionality, should
references to standards be made binding under the provision of Art. 5(3) of Directive

90/387/EEC.

This corresponds to the general approach to the overall adjustment of Open
Network Provision in the context of the follow-up of the 1992 Telecom Review4 [7],

which emphasizes voluntary commitments and commercial negotiation between the

parties concerned, with regulatory intervention only as the last resort.

3 3 As set out, personal communications services are likely to be carried initially by a

combination of existing digital mobile technologies, and ultimately, by a combination

of mobile communications networks and the fixed networks. [48 ]

As a first step to launching this evolution from current mobile services towards such

a personal communications environment, the removal of restrictions on the
combination of multiple mobile technologies or services through a single service

provider is required. This will allow users to access different mobile

communications systems and services via hand sets combining different technologies

such as DCS-1800, GSM, and DECT.

Subsequently, restrictions on the free combination of services provided via the fixed

and mobile networks should be removed.

34 The full freedom to combine fixed and mobile communications services and to offer,

or resell, services via mobile and fixed communications networks without limitations,

including the switching of connections between fixed terminal destinations, will

depend on the schedule for full liberalisation of public voice services established in
Council Resolution 93/C 213/01 [49], namely 1st January 1998, with additional

Council Resolution of 22nd July 1993 on the review of the situation in the telecommunications sector and the need for further development m that market (93/C
213/01. OJ C213/1, 6.8.1993)
For full discussion,see Annex L>. Section 11.
Council Resolution of 22nd July 199] on the review of the situation in the telecommunications sector and the need for further development in that market
(93/C 213101. OJ C2U. 6.R [1] n1

25

transition periods of up to five years for Spain, Ireland, Greece, and Portugal and,
where justified, two years for Luxembourg.

Such fully integrated service provision will be subject to conditions which may be

agreed for licenses for provision of public voice telephony via the public fixed

network, concerning, inter alia, universal service obligations and/ or sharing of the
financing of such obligations. It will also be subject to Community competition

rules.

3 5 In order to introduce a more European focus into current mobile communications
operations and licensing procedures, and to facilitate the establishment of trans
European networks and services, the principle of full mutual recognition of

approvals, licences and authorisations should be applied whenever technically
possible.

36 This applies in particular to mobile terminal equipment.

Mobile terminal equipment should be subject only to type approval according to the
principles of Directive 91/263/EEC [50 ] 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 scope [51] .

Where the provisions of Directive 91/263/EEC have still not been made applicable to
specific types of mobile equipment [52], 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 CTRs [53 ] or other harmonised standards and subject to
the framework provided by ACTE [54 ] establishment of interim type approval

procedures in the context of the European Radiocommunications Committee (ERC)

50 Council Directive of 29th April 1991 on the approximation of the Jaws of the Member States concerning telecommunications terminal equipment. including the
mutual recognition of their conformity (91/263/EEC . OJ LI 28/L 23 5.91)
51 Coucil Directive of29 October 1993 supplementing Directive 91/263/EEC in respect of satellite earth station equipment (93197/EEC. UJ L290/0l. 24.11.93) Specific issues anse, in particular. in the case of terminal equipment not intended for connection to the public switched network. Sec Annex D. Section 8.
52 with the exception of satellite-based mobile equipment covered by Direcuve 93/97/EEC
53 Common Technical Regulations (CTR)
54 Approvals Committee for Terminal Equipment (ACTE)

26

can assist in achieving the objectives of Directives 91/263/EEC and 93/97 /EEC in

those cases [55 ] .

3 7 As regards licensing of mobile communications networks and systems [56], 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
regulations [57] . 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 licences [58] .

39 Where limitations are imposed on the number of licences for the reasons set out

above and the award of licences is carried out, for example, on the basis of

comparative bidding, full application of the principles of mutual recognition is no
longer possible.

Whichever method is used to award licences - first come/first served, comparative
bidding, auctioning, lottery - licence award procedures must be based on open,

non-discriminatory and transparent procedures.

55 For further discussion of the issue of type approvals, see Annex D, Section 8
56 For full discussion of application of Community principles to licensing see Annex D, Sections 3 and 8
57 As defined in Article 3(2) of the Services Directive. See Annex D, Section 3. Where frequency spectrum 1s still available, Member States could. m determining
whether to accept mutual recognition of operator's licences granted in other Member States, take account of the extent to which the objectives sought by trade
regulations would be satisfied by that operator.
58 Proposal for a Council Directive on a policy for the mutual recognition of licences and other national authorisations for the provision of satellite networks services
and/or satellite communications services (to be published)

27

40 The method chosen to award licences should,be implemented in a way that the final

selection offers maximum guarantees for the full respect of the essential requirements

and the achievement of the goals sought in any public service requirements in the

form of trade regulations as regards user benefits, in particular in terms of price.

Lotteries are compatible with the Treaty, but do not seem to offer the most adequate
guarantees for the future development of mobile communications market and, in

particular, do not allow an assessment of the ability of participants to satisfy the

criteria set out, in particular, concerning respect of the essential requirement for

efficient use of frequencies as well as requirements relating to technical competence

and financial resources of the operator, in order to ensure such efficient use.

As regards the award of licences through auctioning on the one hand, studies carried

out for the Commission point to substantial problems flowing from auctioning of
licences and related frequency resources, such as excessive transfers to the public
budget or for ~ther purposes, resulting in artificial barriers to entry to the relevant
market, higher prices to the consumer and a slower coverage of the Union [59 ] . 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. Reports [60 ] in some Member States have addressed the issue of

auctions.

At this stage, comments are sought on the different allocation methods. Currently,
comparative bidding seems to be the method to be considered most satisfactory for
the allocation of public mobile communications licences in the majority of Member
States, while first come/first served is used in the field of private mobile radio, with

the exception of licences and authorisations for Public Access Mobile Radio

(P AMR), serving regional or national Private Mobile Radio systems on a shared

basis.

41 Licensing in the Union is currently carried out at the national level.

59 Additional competition concerns can arise where auctioning of licences for new systems favours the supplier of an existing technology or system, especially if that
supplier is the incumbent TO Auct10ns also may promote the creation of anticompetitive groupings among potential bidders
60 See Committee of experts on basic frequency regulation matters and civil telecommunications for BtvfPT "Frequency regulat10n m the federal Republic of
Germany", June 1991

28

61

62

63

In order to further the development of the internal market and promote pan
European services and networks a number of measures should be taken to overcome
the national fragmentation of the mobile market [61] .

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 exchanged [62], 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 established [63 ] .

Such activity should not be subject to any regulatory restriction. Nor should it be

subject to any surcharge or equivalent measure unrelated to the actual cost of the
provision of the roaming facility itself, whether imposed as result of regulatory or

other action.

43 As regards planning and management of the central resource for mobile

communications - radiofrequencies, substantial progress on coordination in Europe
has been made with the establishment of the European Radiocommunications
Committee (ERC) and the European Radiocommunications Office (ERO).

Examples are discussed in Annexes B and D.
Such technical requirements also extend to adequate provisions ensuring confidentiality of communications, data protection and pnvacy
This freedom is guaranteed by Article _59_ EC. See discussion m Annex _D_

29

64

The major objective must now be to establish the appropriate relationship between
the ERC/ERO framework and the Union, respecting the principle of subsidiarity
whilst safeguarding Union interests and obligations under the Treaty6 [4 ] .

44 In the immediate future, a number of short term bottle-necks in frequency allocation

must be lifted to allow mobile and personal communications market development in

the Union.

This requires both decisions on frequency allocations and the timely implementation

of such decisions by the Member States. This concerns in particular a firm decision
on frequency bands for DCS-1800, firm allocation of harmonised bands and

sufficient frequency resources for the Digital Mobile Trunking System (TETRA) and

establishment of a decision concerning frequency bands for satellite-based personal
communications systems (including so-called Low Earth Orbit (LEO) satellite

systems), including a schedule of allocation.

45 The overall goal for securing the development of the sector should be full

implementation and the early firm designation and schedule of allocation for the

bands set aside at the World Administrative Radio Conference at Torremolinos

(W ARC'92) for the future Universal Mobile Telecommunications System (UMTS _I_

FPML TS) in the 1885 to 2025 and 2110 to 2200 MHz range. This goal is required

in order to provide overall certainty for future sectoral development in the

Community.

This is essential to maintain opportunities for Europe in the future UMTS/FPML TS
system, particularly given current US regulatory policies which give priority to the
satellite-based personal communications systems, where the United States has, at this

stage, a technological advantage.

46 Number allocation and the European numbering space is the second major resource
to which access is vital for the development of mobile services. This will gain

dramatically in importance with the advent of personal communications services.

The new coordination mechanisms m the European Committee for
Telecommunications Regulatory Affairs (ECTRA) and its future associated
European Telecommunications Office (ETO) which will also take care of the
numbering coordination, must rapidly be put into place and a firm relationship with

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

30

65

66

the Union established. Such a relationship should follow the approach taken in the
field of radiofrequencies [6] 5.

47 Several short-term numbering pnont1es will have to be addressed, in particular,

harmonisation of access codes for mobile systems ; harmonisation of access codes

for directory services ; harmonisation of principles of allocation of numbers or

number ranges for access codes for Service Providers or for special service features.

The global objective must be the rapid creation of a European numbering space, as
the only viable long-term basis for personal and portable numbers and Europe-wide

personal communications.

48 Europe, based on its success in current generation digital mobile technologies, is in a

leading position in the race towards the future Universal Mobile Telecommunications

System (UMTS/FPLMTS), which is likely to be a future universal base of personal

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

Community research programmes in the field of advanced telecommunications
technologies [66 ] and in the framework of ET Si's Special Mobile Group (SMG).

However, in order to maintain and benefit from this position, a number of conditions

will have to be fulfilled.

49 The major pre-condition for a market-led introduction of UMTS into the European

telecommunications system is the creation of conditions which promote early

development of Personal Communications Services. The proposed lifting of
restrictions on service otforings which combine services provided through different

existing mobile technologies and/ or via the mobile and fixed networks, will play a

key role in creating such conditions.

Without such steps, the necessary market pull and experience will not be successfully
developed. Nor will the required market volumes be achieved early enough in

Europe to allow a successfol transition in a second stage for those services towards a
unifying technology base such as UMTS, as the most economic ultimate solution.

50 The European Union must contribute in a co-or~inated manner to the drawing up of

strong European positions in the international fora where the future standards,

frequency and numbering decisions in this area will be taken.

See "A new approach to the rnordinat10n of radiofrequencies m the Community, Communication from the Comm1ss1on concerning proposal for a Council
Decision on the implemcntat10n by the Member States of measures concerning radiofrequencies, COM(93)382, 10.9.93"
See in particular, Council Decision of 7th June I 991 adopting a specific research and teclmological development programme in the field of communiction
teclmologies (1990 to I 994)(911352/EEC; OJ LI 92/8, 16.7.91) - the RACE programme

31

This concerns in particular coordination within the International Telecommunications

Union.

Substantial support should be provided to ETSI's Special Mobile Group (SMG).

SMG is working on standards in this area and preparing a European position for the

ITU.

51 European technological development must be flexible with regard to future

technology options, in order to secure an optimum position.

While work in this area should build on the strength of current European digital
mobile technologies, in particular DCS-1800, GSM, and DECT, flexibility with
regard to certain features should be maintained, depending on the outcome of
comparative research currently being carried out in the framework of the RACE
programme. This is the case in relation to future coding techniques used for the air

interface (e.g. the relative merits of Time Division Multiplex Access (TDMA) and

Code-Division Multiplex Access (CDMA)).      

Whichever detailed features are finally chosen, care should be taken to ensure a

smooth transition from the use of current technologies to UMTS technologies.

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

53 The development of Europe-wide networks has been substantially assisted in the past

by conclusion of Memoranda of Understanding between operators and/or

manufacturers in key areas of mobile systems (Mo Us have been agreed, for example,

concerning the introduction of GSM and, in relation to ERMES, teJepoint services,

and the TFTS).

In a number of cases these Mo Us have been extended to cover both EFTA countries

and countries in Central and Eastern Europe and have sometimes been extended
beyond Europe. This cooperation in the introduction of mobile systems should be
further encouraged, in particular, in relation to the future development of UMTS [67] .

54 In order to maximise the potential of European developments in the fields of UMTS,

consideration should be given to awarding licences for such future third generation

67 Priority should also be given to the promotion of use of new types of services, such as transport related information or guidance, on the pan-European mobile

networks (e.g. GSM and UMTS)

32

services from the start in a coordinated mann.er and/or at a Community level.

Account should be taken of the need to ensure a smooth transition from the use of

current technologies for Personal Communications Services to the UMTS
technologies. Account must also be taken of the specific situations in Member

States and the interests of existing licensees.

55 The provisions of the Treaty concerning trans-European networks now present the
opportunity to make a further step in promoting cooperation in the establishment and

development of such networks. The Commission has proposed guidelines

identifying projects of common interest in other telecommunications fields.

In the field of mobile and personal communications, priority could be given to the

establishment of trans-European networks based on satellite-based personal

communications including so-called Low Earth Orbit (LEO) Satellite Systems.

Particular account should be taken of the need to link peripheral regions with central
regions of the Union. Cooperation could be extended to third countries to promote

projects of mutual interest in this field.

56 In order to promote the development of trans-European networks, consideration

should also be given to the award of licences for future mobile communications

systems directly impacting on the development of such networks, in a coordinated
manner between Member States and/or at a Community level, taking due account of

Member States' interests and the interests of existing licensees.

Satellite-based personal communications are a case in point.

57 Elaborating common Union positions in mobile and personal communications with
regard to third countries and ensuring mark~t access to those countries will be

indispensable to drawing maximum benefit for Europe, its mobile industry and

operators.

An important part of ensuring market access is the removal of non-tariff barriers.

Equally, market access will be improved through agreements on the mutual

recognition of conformity assessment procedures.

Coordinated positions are also necessary on issues .having a direct impact on trade in
this field, such as issues related to intellectual property rights, restrictions on the
export of encryption techniques and other sensitive technologies.

33

5_8 As long as equivalent market access to third countries has not been achieved [68], the

ability to take measures with regard to third countries should not be restricted,

subject to Community commitments on a multi-lateral (such as in the context of
GATT), or bilateral basis.

Where asymmetric market access currently exists, Community policy must actively

pursue the on-going multilateral negotiations on basic telecommunications within the

General Agreement on Trade in Services in order to open up foreign market access.

Within the limits of such international commitments and Community · law, an

assessment must be made as to whether the current inequalities can be redressed

within the framework of Community legislation, for example, with regard to non-EU
participation in mobile licences

59 The development of mobile communications into a personal communications mass

market will require firm positions on areas of general public interest in the sector, in

order to safeguard such interests, ensure acceptance by the public of the new

systems and services, and provide a stable environment for future development.

The main issues in this respect concern security, safety, protection of privacy, and

the environment.

60 Security of information systems has been addressed in a more general context in the
framework of the European Community's action plan on this issue, established by

Council Decision 92/242/EEC69.

In the context of the essential requirements identified by the proposed Council

Directive on the application of Open Network Provision to voice telephony, security

of network operations specifically addresses the ability to maintain an appropriate
level of service during defined emergency situations.

With regard to mobile and personal communications systems, major issues are also
raised, inter alia, by encryption, authentication, prevention of fraud, protection of

network management, data bases, and service providers.

68 See discussion in Annex C and m Annex D. Section 12

69 Council Decision of 31st March 1992 in the field of security of informat10n systems (92/242/EEC . OJ L 123/19. 8.5.92) See forthcommg Comm1ss1on Green
Paper on the security of Information Systems.

34

Safeguarding of confidentiality of communications and establishing secure

procedures for handling subscriber and call data are addressed in the context of

protection of privacy and personal data.

61 Another issue is health and safety with regard to potential health hazards from

exposure to electromagnetic radiation and with regard to electromagnetic

interference [70] .

A comprehensive action plan must be set into motion aiming at accelerating the
establishment of necessary safety standards, as well as providing guidance in this

field.

This should concern in particular rapid establishment of Europe-wide standards

concerning thermal effects of radiation, in accordance with the mandate agreed with
CEN-CENELEC in this field. It should also involve the preparation of a work

programme for assessment of activities and research concerning the so-called

athermal effects, and dievelopment of related European standards, as well as
monitoring of potential problems of electromagnetic compatibility with other
electrical equipment, such as hearing aids, heart pace makers, car automatic breaking
systems (ABS) and cable systems.

Given the difficulty of establishing conclusive results on possible athermal effects in

the short term, the low power emission of devices, in particular, for hand-held

equipment, should become an important criterion in future standards development,

systems design and systems deployment. This will assist in reducing overall

electromagnetic exposure.

In the context of health and safety, a concerted approach between measures issued
under Article 1 OOA and measures under Article 118A is required in order to allow
for free movement of goods whilst maintaining the right of Member States to issue
measures limiting the use of such goods to safeguard the safety of workers.

62 As regards environmental concerns, sharing of sites and infrastructures will become a

growing requirement to rnduce environmental impact.

Sharing of infrastructure and sites should be allowed. Where overriding grounds of

environmental policy or town planning so require, obligations on mobile network

70 See Annex B, Section 8.

35

operators to enter into sharing agreements should be possible, subject to the
principle of proportionality.

63   - A central feature to reassure the public about future mobile and personal
communications will be the protection of privacy and personal data.

Given that future personal communications services will combine services via mobile
and fixed networks, this problem must be addressed in a global fashion.

The proposed General Data Protection Directive and the proposed specific
Directive [71 ] will tackle many of the potential problems in this area.

Further, the issue of protection of personal data and protection of privacy should
become major factors in future standards development in the sector, with regard, in
particular, to following a consistent approach in relation to the evolution of personal

communications [72] .

71 Amended proposal for a Council Directive on the protection of individuals with regard to the processing of personal data and on the free movement of such data,
COM (92) 422, 15.12. 92 ("the gcnreral data protection directive") and the forthcoming modified proposal for a Directive concerning the protection of personal
data and privacy in the context of digital telecommunications networks, in particular the inte&rated services dijital network (ISDN) and digital mobile networks
(to be published). For further discussion of these issues, see Annex D, Section _5_
72 This should include consideration of solutions which arc appropriate to the range and characteristics of evolving services, in particular with regard to technical
identification/requirements for anonymity.

36

IV ISSUES FOR COMMENT

The analysis undertaken and the considerations and Treaty obligations set out lead to a range of

proposals, which appear necessary to ensure the full development of the sector. They are set

out below and submitted for comment.

IV.1 Major changes required.

The European Union's ·mobile communications sector can move forward from a position of

strength. Europe has become a world technology leader and has succeeded in attracting

substantial public and private investment to mobile communications. However, the sector

is now at a critical juncture, poised on the transition from analogue to digital technologies,
and from niche to mass market player. In order to fully use the potential and allow

Europe's citizens, industry, inve:stors, and the economy as a whole to reap the benefits,
mobile markets must now be allowed to develop. Existing barriers [73 ] 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 concentrations [74 ] 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 narrowband 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, nondiscrimination, 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 Conunission Directive of 28th June 1990 on competition on the markets for teleconununicat1ons services (90/388/EEC ; OJ L 1921 l O. 24. 7.90)

76 Council Directive of 28th June 1990 on the establishment of the Internal Market for teleconununications services through the implementation of Open Network
Provision (90/387/EEC; OJ Ll92/l, 24.7.90)
77 Conunission Directive of 16th May 1988 on the competition in the markets on teleconununications terminal equipment (88/301/EEC. OJ L 131173. :!7 _5_ 88)

40

These concern in particular the effective use of the radiofrequency spectrum and
electromagnetic compatibility requirements, as well as security of network operation,
maintenance of network intE~grity, interoperability of services in justified cases, data
protection in justified cases, and user safety and safety of employees.

4 Conditions based on public service requirements in the form of trade regulations
should be only those currently identified in Commission Directive 90/388/EEC for
systems intended for use b~· the general public.

These concern conditions o'f permanence, availability and quality of the service. The
safeguarding of permanencE!, availability and quality of the service may imply fulfilling
conditions relating to the tec:hnical competence and financial resources of the licensee.

5 Systems not intended for use by the general public (in particular so-called private
mobile radio systems, used by closed user groups) should be subject to no other
conditions than those based on essential requirements, in particular, effective use of
frequencies and electromagnetic compatibility.

6 In order to foster innovation of systems and services, and to ensure in particular
efficient use of frequencies, the duration of licences should be based on the period
required to pay back investment on reasonable terms.

7 Licences may not include coinditions which restrict ownership by nationals of Member
States or of the European Ec:onomic Area (EEA) or enterprises controlled by nationals
of Member States or of the EEA.

Subject to the European Community's commitments taken on a multilateral or bilateral
basis, licences may include 1restrictions aiming at ensuring at a Union level equivalent
access to third countries.

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

9 Where a limitation of the number of licences to be issued is established by Member
States, such limitation must be based on essential requirements such as efficient use of
frequencies, and/or conditio1r1s of public service requirements in the form of trade
regulation, and must be com;istent with the Treaty competition rules.

Any limitation should respect the principle of proportionality, by imposing the least
limiting solution and giving priority to competitive provision.

78 Council Directive of 29th April 1991 on the approximation of the laws of the Member States concerning telecommunications terminal equipment, including the
mutual recognition of their conformity (91/263/EEC; OJ L128/J, 23.5.91)
79 This includes the extension of these Directives to the satellite sector, which is of direct relevance to mobile satellite-based systems. See in particular, Council
Directive of 29 Oct6ber 1993 supplementing Directive 91/263/EEC in respect of satellite earth station equipment (93/97/EEC; OJ L290/0l, 24.11.93)
for services

41

~~-~~
10 Whichever method is used to award licences - first come _I_ first served, comparative
bidding, auctioning, lottery - the method should be chosen and implemented in a way
that the final selection offers maximum guarantees in respect of the full implementation
of the essential requirements and ensures the achievement of the aims of any public
service requirements in the form of trade regulations. A particular priority should be
maximising benefits for users (in particular, in terms of price and coverage).

11 Reliance on auctions should not lead to an excessive transfer to the pubUc budget or
for other purposes to the detriment of low tariffs for the users.

Lotteries do not seem to guarantee the achievement of the criteria set out under 10, in
particular, concerning efficient use of frequencies, technical competence and financial

resources.

12 The principle of full mutual recognition of licences should apply whenever relevant, in
particular, in the case where licences are awarded on the basis of first come _I_ first
served, subject to the availability of required frequency resources.

This should concern, inter alia, mobile services based on satellite communications, as
put forward in the proposal for a Council Directive on a policy for the mutual
recognition of licences and other national authorisations for the provision of satellite
network services and/or satellite communications services [80]     

It should also apply to systems licensed in border regions between Member States
where systems could provide services on a trans-frontier basis, for example, private
mobile radio systems used by taxi businesses or haulage companies.

13 Where limitations are imposed on the number of licences on the grounds set out under
9 and the award of licences on the basis of comparative bidding or auctioning makes
the principle of mutual recognition no longer fully applicable, national award
procedures must ensure that licence applications by nationals or companies controlled
by nationals of Member States or of the EEA are possible on a non-discriminatory
basis.

No limitations with regard to licence applications may be introduced, except if justified
under Treaty competition rules, in particular Article 86.

14 Mobile terminal equipment should be subject only to type approval according to the
principles of Directives 91/263/EEC and 93/97/EEC which allow the imposition of
specific provisions ensuring electromagnetic compatibility.

Where the provisions of Directives 91/263/EEC and 93/97/EEC have still not been made
applicable to specific types of mobile equipment, and specific licences or class licences
are required in Member States to provide for the safe operation of equipment, the full
mutual recognition of licences granted in another Member State should apply to ensure
free circulation of such equipment in the Community.

15 Licensing conditions for mobile network operators must ensure the respect of
competition rules and in particular, ensure transparent and non-discriminatory
behaviour between fixed and mobile network operators in common ownership.

80 To be published

42

II Service provision

1 Commercial freedom should lbe guaranteed, allowing the provision of services by
independent Service Providers, as well as direct service provision by mobile network
operators. All existing restric:tions in licences impeding such activity should be
abolished.

2 Commercial freedom should iinclude the opportunity for Service Providers, whether
independent or integrated into or forming part of mobile network operations, to offer a
combination of services provided under different mobile licences, as well as the ability
to provide services in different Member States, subject only to the provision of the
Treaty competition ru1es.

3 Service Providers should not be subject to licensing procedures and may be subject
only to a requirement for declaration of their activities to the National Regulatory
Authority(ies) of the Member :State(s) where they choose to operate.

4 A Code of Conduct for Servic1e Providers should be established. The Code should, in
particular, identify on the basis of voluntary participation by Service Providers,
measures to safeguard essential requirements and commitments with regard to
permanence of service, availability, and quality of service. It should also provide
guidelines concerning technijcal, financial, and commercial practices in the sector,
consistent with competition rules.

5 Mobile network operators shc•uld, in line with their obligation to provide open,
transparent and non-discriminatory conditions for interconnection (see point 111.2) have
an obligation to accept all reasonable requests by Service Providers to deal, within the
limits of normal commercial practice and Community competition law (including
requests from Service Providt!rs integrated into other mobile network operations).

It should be possible to challEmge any refusal to deal before the National Regulatory
Authority.

6 In order to guarantee open, transparent, and non-discriminatory conditions for
independent Service Providers, mobile network operators should be required by their
licence to provide for sufficient transparency, in particular concerning their accounting
practices, to allow supervision of the service provision activities integrated into their
operations.

7 The commercial relationship E~stablished between Service Providers and mobile
communications operators should be subject to full mutual recognition by Member
States.

No restrictions should be applied concerning any activity resulting from such
relationships in one Member ~>tate on the activity in any other Member State.

43

The provision of services in the context of cross-border roaming agreements
represents the provision of a service by independent Service Providers or by Service
Providers integrated into a mobile network operation in the territory of a Member State
other than the Member State in which the original commercial activity was established.

Such activity should not be subject either to any restriction or to any surcharge or
equivalent measure unrelated to the cost of the provision of the roaming facility itself,
whether imposed as a result of regulatory or other action.

Ill Interconnection

1 The basic framework for interconnection of mobile communications networks intended
for use by the general public with the fixed network infrastructure operated for use by
the general public is set out by Council Directive 90/387/EEC [81], and Proposal for a
Council Directive concerning application of Open Network Provision to Voice
Telephony and Council Directive 92/44/EEC [8] 2, as well as through the Treaty competition
rules [83]     

According to this framework, the National Regulatory Authorities carry the principal
responsibility for ensuring interconnection, in conformity with the Directives above.

2 As far as other technical and commercial interfaces are concerned, in particular,
between Service Providers and mobile network operators, and also access to intelligent
network functions in the fixed network which are not covered by the specific Directives
mentioned, the basic principles set by Council Directive 90/387/EEC apply.

This impli~s in particular that interconnection conditions established at those
interfaces must be set on the basis of objective criteria, be transparent and nondiscriminatory, cost-oriented, and compatible with the principle of proportionality, as
well as respecting the essential requirements [84]     

The establishment of suitable interconnection agreements respecting these principles
should be principally left to commercial agreements between market participants.

At this stage, it is not considered necessary to establish further specific Directives at
Community level, concerning these interfaces and related interconnection .conditions,
provided these are subject to strict supervision by National Regulatory Authorities to
ensure full application of those principles and the establishment of suitable dispute
resolution and control procedures.

81 Council Directive of 28th June 1990 on the establis})lnent of the Internal Market for telecommunications services through the implementation of Operi Network
Provision (90/387/EEC; OJ LJ92/J, 24.7.90)
82 Proposal for a Council Directive on the application of Open Network Provision (ONP) to Voice Telephony (COM(92)247, 27.8.92) (Common Position adopted
1st July 1993).
Council Directive of 5th June 1992 on the Application of Open Network Provision to Leased Lines (92/44/EEC; OJ Ll65/27, 19.6.92)
83 See Annex D.6.1 and 6.2

84 Where an operator has both a fixed and a mobile network there needs to be sufficient transparency, in particular, concerning their accounting practices.

44

3 The requirement of transparency concerning such interconnection agreements implies
in particular that full access to those agreements is given to National Regulatory
Authorities and that such information is made available to the Commission on request.

4 In order to facilitate interconnection, the establishment of teehnical standards
concerning these interfaces should be promoted and published, where required in
accordance with the provisions set forth in Article 5(1) of Directive 90/387/EEC.

5 Standards regarding interfaces. should only be made binding to the extent required by
the Directive 92/44/EEC concerning application of Open Network Provision (ONP) to     
Leased Lines and the proposed Directive concerning application of Open Network
Provision to Voice Telephony.

In accordance with Article 5(1) of Directive 90/387/EEC, in all other cases, the principle
of voluntary application of standards should apply.

Only in cases where it is strictly necessary to ensure basic interoperability and freedom
of choice for users and subject to the principle of proportionality, should references to
standards be made binding under the provision of Article 5(3) of Directive 90/387/EEC.

6 As regards mobile networks licensed only for own use or use· by closed-user groups
(private mobile radio systems), interconnection with the public network must not be
impeded, and is subject to application of Directive 90/387/EEC, Directive 92144/EEC, and
the proposed Directive on the application of Open Network Provision (ONP) to Voice
Telephony, as regards the issue of access to fixed infrastructure operated for use by
the general public.

The activities which may be carried on via such interconnections are subject to the
provisions under which such mobile communications networks have been licensed. In
principle, conditions applying to such communications networks must not be more
onerous than those applying to other closed user groups operating by use of facilities
of the public fixed networks.

IV Infrastructure

1 Mobile network operators should have full freedom to operate and develop their
network for the purpose of the activities allowed in their licence or authorisations,
including a free choice of facilities used to support such activities.

2 The provision of facilities and use of infrastructure forming part of the public fixed
network is provided for and subject to the provisions of Council Directive 90/387/EEC,
Council Directive 92144/EEC, and the proposal for a Council Directive for application of
Open Network Provision to Voice Telephony. Provisions relating to the interconnection
of mobile and public fixed networks are set forth under Ill above.

3 In addition, mobile network operators should have full rights to establish their own
infrastructure as well as to use infrastructure provided by third parties, subject to
limiting the use of such infrastructure to those activities provided for in their license or
authorisation.

45

------------ ~---~~~------~~-----~--
4 Mobile network operators should have the right to directly interconnect with other
mobile network operators, either via facilities provided by the public fixed network, via
their own infrastructure or infrastructure provided by third parties, both within Member
States and between Member States.

Use of such direct connections should be permitted for all activities allowed for in the
licences and/or authorisations of the respective mobile network operators, and should
include transmission of signalling and control data to facilitate roaming between mobile
networks.    

Where their own infrastructure requires the availability of radio resources such as links
based on microwave transmission, Member States should make available suitable
radiofrequencies.

5 Mobile network operators should be allowed to share infrastructure, other facilities and
sites.

Arrangements must be transparent, non-discriminatory, and respect the essential
requirements, as well as respecting the Treaty competition rules, in particular Articles
85 and 86 and Regulation 4064/89, and the general principles of Council Directive
90/387 /EEC [85] .

National Regulatory Authorities must be kept informed of such arrangements. This
information should be made available to the Commission on request.

6 Member States may require that mobile network operators share infrastructure and sites
and conclude arrangements in line with the principles set out under 5 above, where
overriding grounds of environmental policy, or public safety so require.

Such requirements must respect the principle of proportionality, and must not
substantially impede the activities allowed for in the respective licences or
authorisations and they must be in line with the Treaty competition rules.

V Radiofreguencies

1 The basic principles concerning access to radiofrequencies should be those set by
Council Directive 90/387/EEC which includes in its scope according to Article 2(10)
usage conditions, including "access to frequencies where required".

2 This implies that conditions for access to frequencies must comply with a number of
basic principles.

They must, in particular, be allocated based on objective criteria, procedures must be
transparent and published in an appropriate manner and must guarantee equality of
access and be non-discriminatory.

85 SeeAnnexD.10.2

46

3 The basic approach to frequEmcy planning, allocation, and co-ordination has been set
out in Council Resolution 90lC 166/0286.

Resolution 90/C 166/02 requires, inter alia, that the co-ordination of radiofrequencies
must respect the principle of separation of regulatory and operational duties, while
timely opinions from service providers, industry, users, and standards bodies in
researching the frequencies best suited for further applications should be sought.

Radiofrequency use must take place in accordance with the radioregulations of the
International Telecommunications Union (ITU). Within this framework, work should
proceed particularly towards the timely allocation of sufficient frequency resources to
mobile and satellite applications.

The Resolution also calls for promoting the most efficient use of the frequency
spectrum by taking timely acclount of service provider and user requirements against
the background of industrial development and developments of standards.

4 The framework for carrying out frequency coordination in Europe is defined by Council
Resolution 90/C 166/02, as complemented by Council Resolution 92/C 318/0111.

These two Resolutions identify the CEPT's European Radiocommunications Committee
(ERC) (and the European Radiocommunications Office (ERO) linked to it) as a basic
framework for European coordination in this area, subject to this framework being open
to the opinions of frequency 4axperts from national authorities responsible for frequency
management, telecommunications operators and other Service Providers, industry, and

users.

Council Resolution 92/318/01 calls for full consideration to be given in future to the
mechanism of ERC decisions as the primary method of ensuring the provision of the
necessary frequencies for new Europe-wide radio services, subject to the development
of working methods allowing wide consultation with the categories mentioned above as
well as cooperation and interaction with the European Telecommunications Standards
Institute (ETSI) and the European Commission.

5 In response to the Council Re!solution, the Commission has set out a New Approach to
frequency coordinat.ion in Europe, integrating these elementsB [8] . 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 panEuropean dimension (90/C 166/02; OJ C 166/4, 7.7.90)
Council Resolution of 19th November 1992 on the implementation in the Community of the European Radiocommunications Committee decisions
(92/C 318/01 ; OJ C3 I 8/1, 04.12.92)
A new approach to the coordination of radiofrequencies in the Community, Communication from the Commission concerning proposal for a Council Decision on
the implementation by the Member States of measures concemmg concerning radiofrequencies, COM(93)382, 10.9.93
See Annex D, section 4.

47

.--------------------------------------6 Council Resolution 90/C166/02 also calls for developing common European positions in
relation to the use of the frequency spectrum concerning international frequency
harmonisation, in particular, with regard to the ITU and its relevant World Radio
Conferences using these mechanisms.

The European Community used this approach during the World Administrative RadioConference, held at Torremolinos in 1992 (WARC'92), where major decisions with
regard to radiofrequencies to be allocated for mobile and satellite communications were
taken. The Commission intends to follow the same approach during future World Radio
Conferences, whilst ensuring that Union interests are safeguarded.

7 Major immediate priorities for radiofrequency co-ordination for mobile communications
in Europe result from the requirement for the full and coordinated implementation of
the decisions taken at WARC'92 in the Union.

As regards radiofrequencies for systems intended for the general public, short term
priorities should concern the establishment and implementation of binding decisions
concerning the designation of frequencies at the European and Community level for the
frequency bands designated by WARC'92 for future use by terrestrial mobile
communications and satellite based communications systems.

This should include in particular designation of binding common bands for DCS-1800
services, for the future Universal Mobile Telecommunications System (UMTS), as well
as frequency bands for satellite-based personal communications systems (including so
called Low Earth Orbit (LEO) Systems).

Decisions should also identify firm schedules for progressive availability, as well as
standards to be used, either existing or in development in order to ensure their practical
implementation by the Member States.

8 As regards systems intended for own use or for the use of closed user groups (socalled private mobile radio), an immediate priority should be a decision on designation
of frequency bands as well as time schedule for availability, for systems operating
according to the European digital trunking standard (TETRA), which will gain major
importance, inter alia, in the context of the implementation of the Schengen Agreement
for communications between police forces and between public authorities.

VI Numbering

1 Beside radio frequencies, access to and allocation of numbers is an essential resource
for both mobile network operators and service providers. The importance of this
resource, and the potential bo~le-n,eck it creates, will substantially increase with the
evolution of mobile communications toward personal communications services.

2 Provisions for access to numbers and administration of numbering schemes have been
set out in the proposed Directive on the application of Open Network Provision to Voice
Telephony [90]     

90 Proposal for a Council Directive on the application of Open Network Provision (ONP) to Voice Telephony (COM(92)247, 27.8.92). (Common Position adopted
lstJuly 1993).

48

By analogy with the application of basic principles of Open Network Provision to issues
of access to radiofrequencies, the same principles should apply.

This implies, in particular, that numbers are allocated based on objective criteria,
procedures must be transparent and published in an appropriate manner, must
guarantee equality of access and be non-discriminatory.

3 According to the provision of the proposed Directive on the application of Open
Network Provision to Voice Telephony, Member States shall ensure that the control of
national telephony numbering plans is the responsibility of National Regulatory
Authorities. National Regulatory Authorities should ensure that national numbering

plans, and all subsequent additions and/or amendments to them are published, subject
only to limitations imposed 0111 the grounds of national security, or privacy and data
protection.

4 The basic approach to numbering planning, allocation and coordination has been set
out in Council Resolution 92/C:318/0291.

By analogy with the basic approach in the field of radiofrequencies, Council Resolution
92/C318/02 requires, inter alia, that coordination of numbering schemes respect the
principle of separation of regulatory and operational functions, while allowing account
to be taken, in a timely manner, of the opinions of representatives of National
Authorities concerned with network numbering schemes, network operators, service
providers, industry, and users.

Council Resolution 92/C 318/02 calls for the most efficient use of numbering space and
indicates that Europe-wide mc•bile services are to be a high priority for the development
of coordinated procedures for the management and allocation of telephony numbers
from a European numbering space.

5 - Council Resolution 92/C 318/02 defines the framework for coordination for numbering
in Europe.

The Resolution calls for the w:;e of the mechanisms of coordination of the European
Committee for Telecommunications Affairs (ECTRA) and requests the creation by
ECTRA of a European Numbering Office (ENO), subject to allowing the opinions of all
interested parties to be taken iinto account and involving the Commission as
appropriate. In the meantime, ECTRA is creating a European Telecommunications
Office (ETO), to be based in Copenhagen, which will include the numbering
coordination function amongst its tasks.

In response, and mirroring thE~ approach taken in the field of radiofrequencies, the
Commission intends to conclude with the ECTRA/ETO a memorandum of
understanding and a framework contract allowing work to be entrusted to these bodies
to carry out the harmonisation of numbers and the creation of a common European
numbering space, based on an appropriate legal basis which must ensure that Union
interests are safeguarded.

91 Council Resolution of 19th November 1992 on the prornotlon of Europe-wide cooperation of numbering of telecommunications services (92/C 318/02, OJ C
318/2, 94.12.92).

49

6 Council Resolution 92/C 318/02 also calls for common positions at ITU numbering fora.

Common positions should in particular be developed with regard to the reform of the
global numbering system, currently underway in the ITU. Preparation of common
positions should take place in ECTRA/ETO, provided that safeguarding of Union
interests is ensured.     

7 In line with Council Resolution 92/C 318/02, global priority should be given in the
European numbering coordination process to the creation of a European numbering
space, with particular attention to the requirements for personal numbering.

8 An immediate priority should be harmonisation of current activities aiming at the reform
of national numbering spaces, including issues of numbering for mobile
communications purposes and for personal and portable numbers.

In this context, special attention should be paid to the harmonisation of access codes
for mobile systems, for directory services, and for services of special public interest
such as emergency and information services, as well as access codes of special
relevance to the intelligent network environment This can build on the progress
already achieved in the Union with the adoption of common emergency and
international access codes.

VII Launching the evolution towards personal communications services

1 Personal communications services must be seen as services which ultimately will allow
person-to-person calling, independent of location, the terminal used, the means of
transmission (wired or wireless) and/or of the choice of technology.

Personal communications services will be based on a combination of fixed and

wireless/mobile services to form a seamless end-to-end service for the user.

2 To launch this evolution, and to allow current mobile services to move towards such a
personal communications environment, the basic requirements are to remove initially,
restrictions on the combination of multiple mobile technologies or services through a
single service provider, and subsequently, to remove restrictions on the free
combination of services provided via fixed and mobile networks.

3 In order to allow such development, mobile network operators, or independent service
providers, should be allowed in a first phase to combine different mobile services,
provided under different licences and/or on the basis of different technologies _I_
standards. '

No restrictions should be introduced into new licences in this regard and restrictions in
existing licences should be lifted.

50

4 In a second stage, mobile network operators or independent service providers should
be able to bid for licences for the provision of public voice via the fixed network, as
those licences become available.

At the latest this should be in accordance with the schedule for full liberalisation of
public voice service established in Council Resolution 93/C 213/01, namely 1st January
1998, with additional transition periods of up to five years for Spain, Ireland, Greece,
and Portugal, and, where justified, two years for Luxembourg, subject to the conditions
which may be agreed for such licences concerning universal service obligations or
sharing in the financing of such obligations, and subject to the Treaty competition
rules, in particular Articles 8!ii and 86, and Council Regulation 4064/89.

5 In parallel and in order to givEi full opportunity for the development of personal
communications services by 4~xisting public fixed network operators, such operators
should not be prohibited ab initio from bidding directly or indirectly for licences for any
mobile communications services.

Existing prohibitions on such bids should be abolished at the latest by the deadlines
set for full liberalisation in Council Resolution 93/C 213/01, namely, 1st January 1998,
with additional transition periods for the Member States referred to in 4 above, subject
to the Treaty competition rule:s, in particular Articles 85 and 86 and Council Regulation
4064/89.

6 In order to prepare the mobile communications sector to play its role in the rapid
transition towards a personal communications environment, Member States should
allocate licences, in particular, for those technologies most suited for providing the
wireless part of such services.

In particular, Member States should allocate at least one licence for operating mobile
systems according to the DCS-1800 standard, and allow for the development of microcellular extensions of current mobile systems licensed according to the GSM standard
in the 900 MHz bands.

Member States should also allocate licences for so-called public access _I_ telepoint
applications, in particular, for systems operating according to the DECT standard.

7 In order to promote the develc1pment of trans-European networks, in accordance with
Article 129b of the Treaty, licences for future mobile communications systems directly
impacting the development of such networks should be awarded, where required and
most efficient, in a coordinated manner between Member States and/or at a Community
level, taking due account of M1ember States interests and interest of existing licensees.

In particular, and in accordanc:e with the Council Resolution on the promotion of
systems for satellite-based peirsonal communications, including so-called Low Earth
Orbit Satellites (LEOs) systems, licences for such future systems should be awarded at
a Community level. In order to maximise the potential of European developments in
the field of the Universal Mobille Telecommunications Systems (UMTS), which can
ultimately provide a unified and cost-efficient basis for personal communications
services, licences for such future third generation services should from the start be
awarded in the Community in a coordinated manner and/or at Community level.

51

Account should be taken of the need to ensure a smooth transition from the use of
current technologies for the provision of personal communications services to the use
of the UMTS technologies to provide such services in a more economic and universal
manner, as well as of the need to take account of the specific situations in Member
State and the interests of existing licensees.

52

IV. **3 Measures required** **:for** **implementation**

Building on the positions proposed and the analysis of the current situation and the

measures to be taken, the range of action within the European Union to facilitate the

achievement and smooth implementation of these goals is summarised below. In extending

the existing telecommunications policy of the Union to the mobile communications sector

the following measures can be anticipated :

  - MONITORING OF THE PROGRESS ACHIEVED IN THE INTRODUCTION OF

COMPETITION IN THE SECTOR,

in order to implement the principles set out, and amendment of Directive 90/3 88/EEC92
on competition in the markets for telecommunications services, where required in order

to include those principles.

This would involve in particular :

~ abolition of exclusive and special rights with regard to mobile and personal

communications and replacement by licensing frameworks in line with conditions
that are consistent with European Community law ~

~ definition of criteria to guarantee that licence award procedures are carried out in
an open, transparent, and non-discriminatory manner, in particular, in cases where
there are justifiable technical limitations on the number of licences granted ;

~ measures to ensure the necessary transparency between market participants, in

particular, in cases where fixed network operators also operate mobile networks,

and between the service provision function of mobile network operators and their

other operations.

  - ADJUSTMENT OF THE OPEN NETWORK PROVISION, FRAMEWORK

and amendment of Directive 90/387/EEC93, where required to include the principles set
out in the positions.

This concerns, in particular, adjustment of the scope of Directive 90/3 87 /EEC, in order

to ensure the general application of the principles of equality of access, transparency,
non-discrimination and propo11ionality.

92 Commission D1rcct1vt: of 28th June _I 990 on compet1t1on on the markets for telecommunications services (90/388/EEC ; OJ LI 92/10, 24. 7.90)
93 Council Directive of 28th June 1990 on the establishment of the Internal Market fortelecommumcations services through the implementation of Open Network
Provision (90/387/EEC, OJ Ll92/I, 24.7.90)

53

Such adjustment should be seen in the context of the general process of adaptation,
called for by Council Resolution 93/C 213/01 [94 ]

  - ACCELERATED APPLICATION OF MUTUAL RECOGNITION OF TYPE

APPROVAL OF TERMINAL EQUIPMENT

and extension of Directive 9 l/263/EEC [95 ] to include mobile terminal equipment not
capable of connection to the public network, which is currently outside its scope [96]    

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 Testing [97] .

Further, establishment of interim-type approval procedures in· the context of the
European Radiocommunications Committee (ERC) should be encouraged in order to

facilitate application of the Directive in the case set out above, where, in the absence of
adopted CTRs, recognition is made on the basis of fulfilling the essential requirements.

94 Council Resolution of 22nd July 1993 on the review of the situation in the telecommunications sector and the need for further development in that market
(93/C 213/01, OJ C213, 6.8.93)
95 Council Directive of 29th April 1991 on the approximation of the laws of the Member States concerning telecommunications terminal equipment, including the
mutual recognition of their conformity (91/263/EEC; OJ Ll28/l, 23.5.91)
96 as far as not covered by Directive 93/97 /EEC
97 Council Resolution 85/C 136/0J of7th May 1985, OJ Cl36/J, 4.6.85 and Corrununication of the Corrunission on a Global Approach to Certification and Testing
of 15th June 1989, COM(89)209, OJ C267/3, 19.10.89.

54

  - DEVELOPMENT OF THE MUTUAL RECOGNITION OF LICENCES FOR THE

OPERATION OF MOBILE COMMUNICATIONS NETWORKS, WHERE

APPLICABLE

and adoption of a Directive for this purpose, including mechanisms for coordination of

award and licensing procedures where appropriate in order to promote trans-European

networks.

This should concern, in particular, those cases where award on a first come/first served
basis is · appropriate, and therefore full mutual recognition, subject to availability of
radiofrequencies, is possible, namely :

~ satellite-based mobile communications networks.

This situation will be covered by the proposed Directive for the mutual
recognition of satellite service licences [98 ] ;

~ 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 sector [99], 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 [1] oo

in line with Council Resolution 90/C 166/02 as complemented by Council Resolution
92/C 318/01 [101], a1mmg at promoting close cooperation with the European
Radiocommunications Committee (ERC) _I_ European Radiocommunications Office

(ERO) and recognising the role ofERC Decisions as the primary method of ensuring the

provision of the necessary frequencies, while safeguarding the Union's interests.

Major elements of such a framework should be the conclusion of a Memorandum of

Understanding and a Framework Contract allowing work to be entrusted to these bodies

to elaborate common frequency bands, once an appropriate legal basis for such

cooperation has been put in place.

  - CREATION OF A FRAMEWORK CONCERNING COORDINATION IN THE

FIELD OF NUMBERING,

reflecting the approach taken in relation to the coordination of radiofrequencies set out

above.

In line with Council Resolution 92/3 18/02 [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
the implementation by the Member States of measures concerning radiofrequencies, COM(93)382. 10.9.93
101 Council Resolution of June 1990 on the strengthening of the Europe-wide co-operation on radio frequencies, m particular with regard to services with a panEuropean dimension (90/C 166/02; OJ C166/4, 7.7.90) and
Council Resolution of 19th November 1992 on the implementation in the Community of the European Radiocommunications Committee decisions
(92/C 318/01 ; OJ C318/1, 04.12.92).

See also Council Conclusions of 7th December 1993.

102 Council Resolution of 19th November 1992 on the promotion of Europe-wide cooperation of numbering of telecommunications services (92/C 31 8/02 .
OJ C318/2, 04.12.92).

56

  - ENSURING PROTECTION OF PERSONAL DATA AND PRIVACY IN THE

CONTEXT OF DIGITAL MOBILE COMMUNICATIONS NETWORKS.

and adopting in this context the proposed General Data Protection Directive and the

proposed specific Directive on protection of privacy in the digital network
environment [103 ] . This would strengthen the protection of personal data and privacy in

the context of both fixed andl mobile digital network services.

A central feature of the new environment must be maintaining privacy, in particular with
regard to the handling of subscriber and call data, and the use of intelligent network
services provided via fixed and mobile networks.

Major issues are the safoguarding of confidentiality of communications during

transmission via radio links, automatic registration of the subscribers location in the data

bases required for locating the position of subscribers in the cells of mobile cellular

systems, as well as for the operation of intelligent network services.

This will be indispensable to safeguard public confidence m the future personal

communications environment.

IV.4 Action lines for the development of a favourable environment

A number of action lines shouldl be followed to draw maximum benefit from the proposals.

These action lines aim at :

~ safeguarding the public interest within the sector.

This addresses the concerns over user safety. It also involves meeting the environmental
issues which are fundamental to public acceptance of the future developments in the

sector.

Finally, it concerns interconnection and interoperability which are essential preconditions
to promoting market developments in a competitive environment ~

103 Amended proposal for a Council Directive on the protection of individuals with regard to the processing of personal data and on the free movement of such data,
COM (92) 422, 15.12.92 ("the general data protection directive") and the forthcoming modified Proposal for a Council Directive concerning the protection of
personal data and privacy in the context of public digital telecommunications networks, in particular the Integrated Services Digital Network (ISDN) and public
digital mobile networks (to be published)

57

_.,. ensuring optimum use of the basic resources needed by the sector, by agreeing on clear
priorities both for coordination of radiofrequencies and for numbering, as well as
supporting work towards these objectives ;

_.,. promoting market and service development in the sector, in particular, through the
development of trans-European networks and the promotion of mobile technologies in

the less favoured regions, as well as in Central and Eastern Europe ;

_.,. strengthening the position of European industry, operators and service providers by
ensuring access to third country markets and re-inforcing Europe's position in advanced
digital mobile technologies, in the transition towards the future Universal Mobile
Telecommunications System.

These action lines should be carried out by the Union in cooperation with relevant
organisations, in particular, the European Committee of Telecommunications Regulatory
Affairs (ECTRA) and its future European Telecommunications Office (ETO); the
European Radiocommunications Committee (ERC) and the European
Radiocommunications Office (ERO); the European Telecommunications Standards
Institute (ETSI) and the European Committee for Standardisation and Electrotechnical
standardisation (CENELEC). Such. cooperation should be on the basis of agreed
procedures. Where appropriate, it could extend to the Memoranda of Understanding
established by operators and/or equipment-companies.

I ENSURING SAFETY AND SAFEGUARDING ENVIRONf\ffiNTAL CONCERNS IN

THE FUTURE MOBILE AND PERSONAL CO:MMUNICATIONS ENVIRONf\ffiNT

Central issues which must be addressed are electromagnetic compatibility and the
potential for health hazards through exposure to electromagnetic radiation. The
Commission proposes setting in motion a comprehensive action programme to
accelerate necessary safety standards, as well as providing general guidance in this field. .

This must involve in particular :

..... rapid establishment of Europe-wide safety standards concerning thermal effects of
radiation, in accordance with the mandate agreed with CEN-CENELEC for

58

establishing European standards in this field, b·ased on Directives 91/263/EEC and
93/97/EEC10 [4], 73/23/EEC [105], and 89/336/EEC10 [6 ] ~

-+ 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-ABSsystems, and cable systems ; issuing of mandates to CEN-CENELEC to establish
appropriate European :standards for enhancing protection, where required and to
the extent not covered by existing mandates ..

-+ rapid integration of European standards in this field into TBRs (Common
Technical Basis for Regulation), and CTRs (Common Technical Regulations) used
in approval of mobile or related equipment.

In order to reduce overall electromagnetic exposure, low power emission characteristics,
in particular for hand-held equipment, should become an important criterion in future
standards development, systems design and systems deployment.

In order to safeguard the environment and to take account of town planning issues,
standards should be designed to allow sharing of sites and radio infrastructure

The Commission proposes to give special attention to these aspects in future
standardisation mandates to the European Telecommunications Standards Institute
(ETSI) and to CEN-CENELEC, as well as in the preparation of positions in the

international standardisation fora.

104 Council Directive of 29th April 1991 on the approximati•)n of the laws of the Member States concerning telecommunications terminal equipment, including the
mutual recognition of their conformity (911263/EEC; OJ L128/I, 23.5.91)
Council Directive of29 October 1993 supplementing Directive 91/263/EEC in respect of satellite earth station equipment (93/97/EEC; OJ L290/0I, 24.11.93)
105 Council Directive of 19th February 1973 on the harmoni~;ation of the laws of the Member States relating to electrical equipment designed for use within certain
voltage limits (73/23/EEC; OJ L 77/29, 26.3. 73)
106 Council Directive of 3rd May 1989 on the approximation of the laws of the Member States relating to electro-magnetic compatibility (89/336/EEC, OJ L139/19.
23.5.89), and Council Directive of 28th April 1992 amending Directive 89/336/EEC on the approximation of the laws of the Member States relating to electromagnetic 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 programmes10 [7] .

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 precondition for realisation of the market's full potential. It is also the basis of the
implementation of an open environment according to the principles of Directive

107 In particular the Community's programme for supporting conformance testing (CTS programme)

61

90/387/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 Council Directive of 28th Jwie 1990 on the establishment of the Internal Market for telecommunications services through the implementation of Open Network •
Provision (90/387/EEC; OJ L 192/1, 24.7.90)

109 Cowicil Directive of 28th April 1991 on the approximation of the laws of the Member States concerning telecommwiications terminal equipment, including the
mutual recognition of their conformity (91/263/EEC; OJ L 12811, 23.5.91), and Council Directive of 29th October 1993 supplementing Directive 91/263/EEC in
respect of satellite earth station equipment (93/97/EEC, OJ L 29011, 24.11.93)

62

        - within the implementation of the W ARC'92 decisions, establishment of an

ERC Decision concerning frequency bands for satellite-based personal

communications systems (including so-called Low Earth Orbit (LEO)

satellite systems).

-.. global objective :

       - early designation and schedule of allocation for the bands set aside at

W ARC'92 for the future Universal Mobile Telecommunications System

(UMTS) _I_ Future Public Land Mobile Telecommunications System

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

This should provide overall certainty for future· sectoral developments in

the Union.

The Commission intends to follow closely full implementation by the Member States of

decisions in these priority areas as well as of Council Directives 87/372/EEC,

91/287/EEC, and 90/544/EEC concerning frequency allocation for the Global System

for Mobile Communications (GSM), Digital European Cordless Telecommunications

(DECT), and the pan-European digital paging system (ERMES), as well as existing

ERC Decisions such as the ERC Decision for the•Terrestrial Flight Telephone System

(TFTS), which should provid1e the basis for rapid introduction of public aeronautical

correspondence services in the Union, and the ERC Decision on Digital Short Range

Radio (DSRR).

4 INITIATING COORDINATION OF NUMBERING AND WORKING TOW ARDS A

EUROPEAN NUMBERING SPACE FOR PERSONAL COMMUNICATIONS

As set out in the positions, the creation of a European numbering space is the key to the
viable implementation of a personal communications environment in the Union.

At the same time, a numb1~r of immediate steps can be taken to facilitate the
development of mobile communications.

The Commission therefore proposes the following main priorities in the co-ordination of
numbering for mobile and personal communications :

63

~ specific action :

          - harmonisation in the framework of ECTRA/ETO, and in close contact

with ETSI and the respective Mo Us set up for system implementation, of

access codes for mobile systems ;

          - harmonisation of access codes for directory services ;

          - harmonisation of principles for allocation of numbers and number ranges

of access codes for Service Providers or for special service features ;

          - harmonisation of access codes to emergency services, as far ~s not

covered by Council Decision 91/396/EEC110, and other services of

special public interest ~

          - harmonisation of access codes of special relevance to the intelligent

network environment.

~ global objective :

          - rapid creation of a European numbering space, as the only viable long

term base for personal and portable numbers and Europe-wide personal

communications, in line with Council Resolution 92/C 318/02111 . This

should be . based on preparation by ECTRA and should use the

opportunity for profound reform offered by the global reform of the

world numbering system currently underway in the International

Telecommunications Union.

The Commission intends to follow closely full implementation by the

Member States of decisions in these priority areas.

110 Council Decision of 29th July on the introduction ofa single European emergency call number (91/396/EEC; OJ L 217/31, 6.8.91)
111 Council Resolution of 19th November 1992 on the promotion of Europe-wide cooperation on numbering of telecommunications services (92/C 318/02,
OJ C318/2, 4.12.92).

64

5 FACILITATING THE DEVELOPMENT OF TRANS-EUROPEAN NETWORKS

BASED ON MOBILE AND PERSONAL COMMUNICATIONS TECHNOLOGIES,

as well as their use to support the development of telecommunications in the less
favoured regions, and in the countries of Central and Eastern Europe.

The development of Europe-wide mobile operations has been substantially assisted in
the past by conclusion of Memoranda of Understanding between operators and/or

manufacturers in key mobile system development areas. Examples include the MoU
concerning introduction of GSM, and in relation to ERMES, telepoint services and more
recently TFTS. In a number of cases, these MoUs have been extended to cover both
EFT A countries and countries in Central and Eastern Europe and have sometimes

extended beyond Europe.

This cooperation in the introduction of such mobile systems should be further

encouraged.

The provisions of the Treaty concerning trans-European networks now present the

opportunity to make a further step in promoting such cooperation through the
establishment and development of such networks. According to the Treaty, particular
account will be taken of the need to link peripheral regions with central regions of the
Union. Furthermore cooperation may be extended to third countries to promote
projects of mutual interest and to ensure the interoperability of networks.

 - The Commission has proposed guidelines identifying projects of common interest in
other telecommunications fields. It is proposed that in the field of m_obile and personal

communications priority should be given initially to the establishment of trans-European
networks based on satellite-based personal communications including so-called Low
Earth Orbit (LEO) satellite systems.

This should include, together with the Member States and the sector, the establishment
of guidelines identifying projects of common interests, and identifying projects of mutual

interest with third countries.

Further, special attention should be given to provision of telematics applications via

mobile networks/services, in fields such as transport, health care, education and training
where the use of mobile communications offer flexibility for new applications.

65

6 ELABORATING COMMON COMMUNITY POSITIONS WITH REGARD TO

THIRD COUNTRIES AND ENSURING MARKET ACCESS TO THOSE

COUNTRIES,

in order to ensure the Union's full contribution to the global development of mobile and

personal communications and equivalent market access for European equipment

industry, network operators and service providers.

Main objectives should be :

~ Common Community positions in the international fora where the major future

standards, frequency, and numbering decisions will be taken.

This concerns coordination in the International Telecommunications Union and its

World Radio Conferences, and with committees and working groups m the

respective standards and numbering fields ;

~ development of common procedures with regard to trade and circulation of

services and equipment to/from third countries in line with any agreements by the
European Union with those countries and based on the principles of the GATT ~

~ Common Community positions on issues having a direct impact on trade and
Community exports in this field, such as issues related to intellectual property

rights, on restrictions on exports of encryption techniques and other sensitive

technologies ;

~ Common Community positions with regard to obtaining equivalent market access

to third country markets, taking account of the Union's commitments on a multi
lateral or bilateral basis.

7 CONTINUING SUPPORT FOR THE EVOLUTION TOWARDS THE UNIVERSAL

MOBILE TELECOMMUNICATIONS SYSTEM,

as a common future basis for personal communications.

The Universal Mobile Telecommunications System (UMTS), currently under
development in Europe, aims at ultimately providing a unified cost-eflicient basis for

personal communications services.

66

It is proposed that :

~ the Community continues its support for UMTS developments through its

research programmes in the field of communications technologies, in the context
of its R&D Framework Programme and by promoting telematics applications on

UMTS.;

~ substantial support is provided to ETSI's Special Mobile Group (SMG). SMG is
working on standards in this area and preparing a European position for the

standardisation sector of the International Telecommunications Union which is

dealing with this area under the title Future Public Land Mobile
Telecommunications System (FPLMTS) ;

~ work in this area builds on European strength in current digital mobile
technologies, in particular DCS-1800, GSM, and DECT. At the same time
flexibility with regard to certain features must be maintained such as future coding
techniques used for the air interface, depending on the outcome of comparative
research currently being carried out in the framework of the Community's research
and technological development programme ~

~ the satellite component of UMTS should be carefully investigated, in view of the
current proposals for satellite-based personal communications;

~ whichever detailed options are finally chosen, care should be taken to ensure a
smooth transition from the use of current technologies to UMTS technologies.

67

**V** **CONCLUSION**

The evolution of mobile and personal communications represents one of the three major trends

which dominate the current developments in communications - alongside the general

globalisation and internationalisation of the communications sector, and the emergence of multi

media services, combining the digital provision of voice, image, and data and of interactivity.

At the same time, mobile and personal communications networks will form a major component

of the future trans-European communications network environment.

The European Union enjoys a position of technological leadership in this sector.. Maintaining

this position and drawing maximum benefit from it for the European citizen, European industry,

and European society now depends on creating the right conditions for future development.

The major pre-conditions will be increasing market flexibility, while developing a common

vision and safeguarding the fundamental public interest in the sector. Contributing to finding

the right balance in the context of the Union through a broad public discussion is the aim of this

Green Paper.

After an appropriate period of consultation, the Commission will present its conclusions on the

future development of mobile and personal communications in the European Union and on the

required measures.

68

Towards the Personal Communications Environment:

. Green Paper on a common approach in the field of

mobile and personal communications in the European Union

J\.NNEXA

REVIEW ()F TECHNOLOGY

AN~DMARKET

DEVELOPMENTS

69

TABLE OF CONTENTS

REVIEW OF TECHNOLOGY AND MARKET DEVELOPMENTS ........................................ 72

1. GENERAL OVERVIEW .................................................................................................. 72

1.1 The transition to digital systems .............................................................................. 7 4

1.2 Second and third generation systems ....................................................................... 74

1. 3 Convergence of mobile communications with intelligent systems .............................. 7 5

1.4 Sharing of resources ............................................................................................... 75

1. 5 Satellite-based systems ........................................................................................... 7 6

2. PUBLIC MOBILE COMMUNICATIONS ....................................................................... 77

2.1 The Global System for Mobile Communications - GSM ..... : .................................. 77

2.2 Digital Cordless Telecommunications - DECT ...................................................... 80

2.3 Public Access/Telepoint Applications ...................................................................... 81

2.4 The Pan-European Digital Paging System - ERMES ............................................. 82

2.5 The Terrestrial Flight Telecommunications System-TFTS ....................................... 83

2.6 The evolution towards the Universal Mobile Telecommunications System UMTS .................................................................................................................... 83

3. PRIVATE MOBILE COMMUNICATIONS ..................................................................... 85

3 .1 Private mobile radio (PMR) .................................................................................... 85

3 .2 The trend towards digital trunked systems - TETRA ............................................... 8 5

3 .3 Mobile Data ........................................................................................................... 86

3.4 Digital Short Range Radio-DSRR ........................................................................... 86

3.5 Wireless LANs and Wireless PABXs ...................................................................... 86

4. THE CONVERGENCE OF FIXED AND MOBILE COMMUNICATIONS : THE

EVOLUTION TOW ARDS A PERSONAL COMMUNICATIONS
ENVIRONMENT ............................................................................................................. _j_ . 87

4.1 The development of Micro Cellular Networks .......................................................... 87

70

4.2 Personal Communications Network-PCN/DCS 1800 ............................................... 88

4.3 Wireless in the local loop ........................................................................................ 88

4. 4 Complementary growth of traffic on mobile networks and the fixed network ............ 8 9

4. 5 Development of mobility in the fixed network: personal numbering in the
intelligent network environment ............................................................................... 89

4. 6 The convergence of mobility in the fixed and mobile networks: personal
communications as a global service offering, and the role of service
providers .., ............................................................................................................. 91

4. 7 Tbe future personal communications environment, the role of the Universal
Mobile Telecommunications System, satellite based systems and the
intelligent network .................................................................................................. 93

5. CONCLUSIONS .............................................................................................................. 97

71

REVIEW OF TECHNOLOGY AND MARKET DEVELOPMENTS

1. GENERAL OVERVIEW

Mobile communications is currently the fastest growing sector within the
telecommunications industry. The majority of this growth has occurred since the mid-l 980s
following introduction of public_ cellular telephony services in Europe, although private
mobile radio communications have in fact been in use in Europe since the 1940s.

Europe today has a total mobile user base of around 16 million subscribers (a figure which
excludes cordless telephony), made up mainly of users of the three most established services

   - private mobile radio, paging and analogue cellular radio. This total user base grew by over
20% in 1991, led by an increase in cellular users of over 40%. As well as now accounting
for greater than 50% of the total user base, cellular also accounts for over 90% of the value
of the total European market for mobile services and 75% of that for mobile equipment!.

Because of the diverse requirements driving mobile developments, many teclmology and
market characteristics are exhibited at the level of individual systems and services. A
number of important trends, however, are significant in terms of the general continuing
development of the sector [2] .

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 networks [2 ]    - ....................................................•.•••..........•.•••....•••••.•••••••••• 70o/o
and on private networks [3 ] ..............................................•..•..•................•.•••••••••.•••••• 30°/o

operating on analogue systems [4 ] ..............•...••.•......••.••.••••••••••••.•••••••••••.•••••••••••••••••• 91 %
and on digital systems [5 ] ..................................................•.......................••...•.•.•....•.•• 9°/o

2. SERVICE REVENUES

Total public mobile service revc:nues in Europe [6 ] ...••••.••••••••••......•.••.•.••• 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 networks [7 ] .......................................•............•............................••..•.•.•.••• 25°/o

4. PROJECTED CUMULATIVE INVESTMENT TO 2000 [8 ]

Projected investment in mobile infrastructure (lower bound [9] ) ................ 27 Billion ECU

Projected investment in mobile infrastructure (upper bound [10] ) ............... 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.

4

6

9

10

11

Analogue systems include: analogue cellular telephony, analogue paging and PMR and analogue PAMR.

Digital systems are: GSM cellular telephony. OCS 1800 cellular telephony, digital PA.MR and telepoint. GSM

cellular telephony, currently w1dergoing rery rapid expansion, represents the majority of digital users.

1993 service revenues for analogue and digital cellular telephony, and wide-area paging.

Includes paging tenninal, private mobile radio tenninals and private mobile radio base stations.

During this period, mobile telephony subscribers as a percentage of all telephony subscribers will increase
from approximately 4% to 11.14%. Re\"enues will also grow although declining costs and the effects of
competition (notably the range of tariff packages offered) will mean that revenues per subscriber will fall from
the present level of over 1100 ECU ~r arumm to less than 500 ECU.

Based on public investment plans and on licences already all0cated or planned.

Assuming widespread adoption of Personal Conununications based on OCS 1800 teclmology.

Cumulative teleconununications investment in the European Union from 1991 to 2000 will be 345 to 401
Billion ECU according to Analysys' study •perfonnance of the Telecommunications Sector up to 2010 under
different Regulatory and Market Options·. 

73

1.1 The transition to digital systems

Recent technical development in Europe has been concentrated on secondgeneration 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
services [3 ] 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· roam [4 ]

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 spectrallyefficient 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 services [6] .

In an already changing environment, it appears that the usage of satellite systems
for mobile services may enter yet another period of revolutionary change, now
brought about by new concepts for personal communication services via satellite.
Already in the Inmarsat system, terminal sizes and related prices are decreasing.
The new systems that are proposed offer a wide variety of technical solutions in
tenns of power of the systems, architecture, facilities or use of orbits (ranging from
systems using the Geostationary Orbit (GEO) to systems using a Low-Earth Orbit
(LEO), Highly Eliptical Orbit (HEO) or even other orbits). A common aim of these
systems is the delivery of voice and/or non-voice services to customers via mobile,
hand-held terminals [7] .

5 Inmarsat Standard-A tem1inal is the original terminal used by Inmarsat for its services. In January 1991
Imnarsat added the Standard-C tem1inal to its range. This latter category of terminal is used for text and data
services only. At the end of 1992 there were approximately 3.500 oflnmarsat C terminals in use. ·

At the beginning of 1993 Inmarsat launched its Inmarsat-M (portable satellite phone) service. Inmarsat also
offers an aeronautical satellite communications service (since 1990). Future plans include the introduction of
Inmarsat-B, the digital successor to Inmarsat-A.

6 Published market research suggests that the current base of around 6,000 tem1inals for land mobile satellite
data services, such as Inmarsat C and Euteltracs in Europe should rise to 100,000 terminals in use by 2000.

7 See Conununication from the Commission on satellite personal communications, COM(93)171 final, 27 April
1993. Most proposals are currently US-based, such as the widely-known proposal for the Iridium project led by

Motorola.

76

2. PUBLIC MOBILE COMMUNICATIONS

2.1 The Global System for Mobile Communications - GSM

While analogue cellular systems still dominate the European installed base, GSM       the new pan-European digital system is catching up rapidly (see Exhibit A2).

Work on GSM standardisation started in 1982 under the CEPT (the European
Conference of Post and Telecommunications Administrations) and was transferred
to ETSI following its formation in 1987. GSM introduction was from the start
strongly supported by the European Community, in particular by a Council
Recommendation and Council Directive adopted in 1987, and a Council Resolution
adopted in 1990 [8] .

GSM is now the major European digital mobile system and has ·become a worldwide success [9] . Its implementation was supported by the GSM Memorandum of
Understanding (MOU) in which all European Community operators are members.

8 Council Directive of 25 June 1987 on the frequency bands to be reserved for the coordinated introduction of
public pan-European cellular digital land-based mobile communications in the European Community
(87/372/EEC; OJ Ll 96/85, 17.07.87) (GSM);

Council Reconunendation of 25 June 1987 on the coordinated introduction of public pan-European cellular
digital land-based mobile communications in the Community (87/371/EEC; OJ Ll 96/81, 17.07.87);

Council Resolution of 14 December 1990 on the final stage of the coordinated introduction of pan-European
land-based public digital mobile cellular communications in the Community (GSM) (90/C329/09; OJ C329/25,

31.12.90).

9 For details of the Community strategy in this field, see Communication from the Conunission on the
coordinated introductimi of the pan-European digital cellular mobile conununications system (GSM),
COM(90)565 final, 23.11.90

77

Exhibit A2 : Main Trends in cellular telephony during 1993

Analogue still dominates the European installed base. - ..

Belocom B NMT 450 66.000 14%
# ~~·--J-~~

TeleDarunark NMT 450 47.000 -6%

23%

9%

-11%

82%

1%

23%

25%

-33%

39%

E

u

E

F

T

A

Deutsche Telekom D

Telefonica E

IT Radiocom 2000

SFR

Eircell IRL

SIP

P&T L NMT4SO 950 0%

PTT Telecom NL NMT4SO 27.000 4%

NMT900 170.000 33%

TMN ~~p~~ C-Net 30.000 30%

Cellnet UK TACS 900 711.000 23%

Vodafone TACS 900 895.000 19%

PTV A C-Netz 56.000 -7%

D-Netz 145.000 49%

Telecom Finland SF NMT450 168.000 6%

NMT900 235.000 33%

Telemobil N NMT 450 159.000 _5%_

NMT 900 162.000 38%

Comvik ~~s~~ NMT 450 21.000 00/o

Telia Mobltel NMT 450 257.000 3%

NMT900 452.000 21%

PTT CH Natel C 241.000 17%
Ei!fonMtftt?ttfti~:::~:tft: -:-:·:::::::::::::::::;::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: nttt:t~:::::::tt?/:::· :::::::::::::::::::;:::::::::::::::::::::::::·::::;::::·:·:· - . ..,/::j:j:::«$4~§sq::::=:j}}:j~m:tj®.?.4tltifj - .·.;.·.·.·.:·:·:·:·:·:·:-:-:-:-:-:-····:·:-:·:·:·:·:·:·:·:·:·:·:·:·:·:·:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:-:

Comvik ~~s~~

Telia Mobltel

P&T L

PTT Telecom NL

TMN ~~p~~

Cellnet UK

Vodafone

PTV A

NMT900

C-Netz.

NMT450

TACS900

RC 2000

NMT450

TACS900

R1rrs

TACS 900

NMT4SO

NMT4SO

NMT900

C-Net

TACS 900

TACS 900

C-Netz

D-Netz

NMT450

NMT900

185.000

807.000

59.000

180.000

331.000

125.000

50.000

35.000

950.000

950

27.000

170.000

30.000

711.000

895.000

56.000

145.000

168.000

235.000

Telecom Finland SF

Telemobil N

~ource: uperators·puoushed marKet research

... but GSM growth is strong in a number of Member States.

=.·1!!l!! **l** !!!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

DK GSM

GS~f

D GS~f

GS~f

F GS~f

GS~l

GSM

p GS~1

GS~I

UK GS~I

GR GS~I

GS~f

IRL GS~1

L GS~I

|=.·1!!l!!l!!!l<br>E<br>U|.~l!!!!!l!l!l!l!lll!l!l!l!!!!!!!l!l!~l!lll!!!!!!!l!l!l!l~!l\!!<br>TeleDanmark DK<br>Dansk<br>Mobiltelefon<br><DMTI|
|---|---|
|=.·1!!l!!**l**!!!l<br>E <br>U|~~DeTeMobilDI~~<br>~lannesmannDl<br>~~FTItinerls~~<br>SFR<br>SIP<br><br>~~D ~~<br>~~F~~ <br>|

A GSM

SF GS~f

6.000 Mar-92

- 15,000 Jul-92

190.000 Jul-92

260.000 Jun-92

15.000 Jul-92

7.000 Jul-92

1 .000 Oct-92

16.500 Oct-92

21.000 Oct-92

l .Ol'lO Dec-91

..3.0<.)() Jul-93

.. 3.000 Jul-93

 - ·~ Jul-93

PTV

Telecom Finland

E Radiolinja

P&T L GS~I  - 3_~ Jul-93

PTV A GSM 0 Oct-93

Telecom Finland SF GS~f 5.000 Jun-92

E Radiolinja GS~l 6.000 Dec-91

F T elemobil N GS!\f 1.000 May-93
T ~etCom GSM - 2.._COO Sep-93
A C-Omvik S GS~1 5.500 Sep-92
E.uropolitan GS~i 2.000 Sep-92

Telia Mobitel GS!\1 3.500 Nov-92

PTT SZ GSM 2.000 Mar-93

GS~l

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 1 e 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, telepoint [14 ] 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 required [18] .

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, inhouse 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
markets [20] .

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 company [21 ] 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 networks [22]        

ETSI is shortly to produce a technical report and recommendations for
standardisation conceming wireless local loop technologies.

4.4 Complementary gro·wth of traffic on mobile networks and the fixed network

. Current demand for cellular telephony, which accounts for 90% of mobile service
revenues, translates into substantial additional telephony traffic over and above that
between fixed network subscribers.

This is mainly attributed to the fact that the mobile subscriber is more of the time in
a position to initiate and receive calls. Mobile communications overcomes the main
disadvantage of fixed telephony - an ability to reach the called party only 30% of
the time. Calls to a mobile subscriber are more often completed, which has the
effect of producing increased calling.

Currently, in develop€xl markets, according to estimates, 95% of calls involving a
mobile subscriber are made to or from a fixed subscriber. A large majority of the
demand for cellular communications correspondingly tran$tes into additional
revenue for the fixed network.

In the medium to long term, the proportion of mobile-to-mobile calls may increase
as users, both business and ordinary consumers, start to subscribe in volume to
wireless personal communications services.

Projections for wireless personal communications in more advanced markets
suggest that 30-40% of consumers and 30-50% of business users may subscribe to
mobile personal communications by the year 2010.

As a result, there could be a diversion of revenue from the fixed network operators,
if they do not adopt a strategy allowing them to evolve into personal
communications services providers - and are allowed to do so.

The challenge for the traditional fixed network operators during this time frame will
be to ensure their active participation in the overall growth of the personal
communications marki~t and in related markets, as they develop.

4.5 Development of mobility in the fixed network: personal numbering in the
intelligent network environment

A range of services and equipment have been developed which assist mobility on
the fixed network:

22 Mercury Communications has also announced its intention to provide local access to its fixed network using
radio teclmology.

89

          - 'supplementary' services such as call forwarding and diversion have long been
available in private networks. These are now becoming available on the
PSTN/ISDN, however, the number of subscribers who have access to or use
them is currently limited23;

          - cordless technology offers freedom of communication without physical
connection to the network, within range of home;

          - services such as card-based rebilling and telepoint add convenience to making
calls from different locations;

          - voice messaging services and terminal equipment such as answering and
facsimile machines allow messages to be received whilst away from the normal

          - location;

          - a limited number of services employing the concept of a personal number also
exist, but have to-date attracted few users. Such services are currently based on
proprietary pre-intelligent network functionality deployed on a service-specific
basis.

The future prov1s1on of services under a full-scale. universal personal
telecommunications (UPT) concept [24 ] 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 lowmobility, 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
offering [25 ] .

With regard to the voice telephony service, which will continue to be the main
requirement of personal communications users of all types, suppliers in Europe are
aiming at a range of solutions increasing consumer mobility across the different
user environments:

          - Development of personal numbering services on the fixed network. This will, as
its major benefit, :facilitate increased contactability at potentially any location
where the user is likely to be stationed for any length of time.

          - Roll-out of micro-1;ellular networks coupled with marketing initiatives to target
consumers. The cellular approach aims to produce a single solution to personal
communications, allowing users to make or receive calls at most locations (e.g.
via roaming), using a single personal communicator.

          - Introduction of cordless P ABXs, driven by manufacturers, which will facilitate
mobility around business premises and is likely to generate requiremen~s for
roaming between sites.

25 See also "Review of the Requirements for the future hannonization of regulatory policy regarding mobile
communications services", report by ECTRA Mobile Project Team, European Conunittce for
Teleconununications Regulatory Affairs, October 1993.

91

This may stimulate the potentially large but currently unsatisfied European
consumer market for low-cost cordless telephones. Home and office cordless
use may stoke demand for telepoint-type services in key locations such as town
centres and transport hubs.

- Introduction of mobile systems (both terrestrial and satellite-based) to extend
access to communications to aeroplanes, high speed trains, ships etc.

- Promotion of small wireless personal communications devices for business and
work applications, such as personal digital assistants and handheld personal
terminals, permitting in particular wireless data transmission and remote
database access.

The emerging personal communicators will create radios new requirements,
initially for electronic mail and facsimile but likely to develop with the
broadband multimedia market.

It is likely that some combination or convergence of services offered via these
approaches may occur in order to exploit all the market opportunities which exist
for personal communications:

- At the level of service provision, an opportunity would exist to offer service and
tariff packages based on the combined use of network- and facilities-based
services from different suppliers, together with the necessary tem1inals,
numbers, cards etc, providing sufficient flexibility is offered to service
providers.

In an increasingly complex networking environment, integrated service
providers could have a valuable role advising on and tailoring packages to suit
different requirements.

- At the user level, possibilities to converge and simplify the use of personal
communications across different platforms could include:

The ability to employ the same personal number across different types
of network and service (which is part of the full vision of UPT);

A single smartcard, which could be inserted into different tenninals~
whether they be fixed, cordless or mobile, to access serv.ices offered
over different systems in a uniform and simple way;

Dual- or multi-mode 'personal communicators' which would support
access to different networks.

Examples of dual-mode terminals already exist, for exan1ple
cordless/paging for telepoint applications and analogue/digital cellular
terminals. Further possibilities are DECT/GSM, DECT/DCS1800,
GSM/DCS 1800, GSM/satellite(LEO), DCS 1800/North American
PCS. Such terminals are technically feasible, but would, at least
initially, be likely to cost 10-40% more than single-mode tenninals for

92

either syst 1 em, 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
equipment [26] ;

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 communications [27] .

These trends lead to predictions for a three to four-fold increase in the number
of wireless terminals in use by the year 2000 compared to today.

          - The need for major players to reassess competitive strategies in the light of
continuing liberalisation and greater competition both within and across the
fixed and mobile areas, particularly in the light of the liberalization of public
voice telephony by I st January 1998 according to Council Resolution
93/C2 l 3/0 I [28] .

The number and range of players who appear likely to make the delivery of some
form of personal communications services a central part of their future planning
indicates that personal communications will be one. of the main investment drivers
in telecommunications over the next 15 years. Projected cumulative investment in
mobile communications infrastructure alone ranges from 27 to 45 billion ECU up to
the year 2000, representing between 7 and 13 % of total telecommunications
investment.

Much of this investment will need to be directed to the building of a strong
intelligent networking base necessary to provide mobility functions, personal
numbering, billing, individual service tailoring and other enhanced services.

27 See in particular EUTELIS "Scenario Mobile Conununications 2010 - Study on forecast developments and
future trends in technical developments and conunercial provisions up to the year 2010, October 1993".

28 With additional transition periods of up to five years for Spain, Ireland, Greece and Portugal and, where
justifiied, two years for Luxembourg.

94

It is likely that the development of personal communications in Europe up to 2000
or beyond will be characterised at the network level by a broad diversity of
networks and systems supporting a range of service capabilities, including:

- GSM, DCS 1800 (PCN) networks

- Cordless, Telepoint (DECT, other CT)

- Satellite personal communications systems (including LEOs)

- Intelligent fixed networks

- Fixed/wireless loop access

- Paging (ERMES),

- TFTS,

- private mobile radio, such as TETRA

Competition between operators of public networks and systems will be a key
feature of the future environment. Today, this largely exists between operators of
similar systems; functionally different systems tend to be aimed at different market
segments, offering services which are distinct in application and cost. There will in
future, however, be much closer competition across the above areas as system
functionalities are expanded and costs reduce.

An important question i;;onceming longer-term network development for personal
communications relates to the linkage between strategies based on incremental
development of current 2nd-generation technologies to support personal
communications services (which is likely to produce partial integration of services·
anri systems) and strategies for introduction of the 3rd-generation UMTS to support
personal communications, fully integrated at the network and system level.

The balance of these strategies will be determined in the main by commercial
evakation and regulatory influences. Technical factors which could influence
decisions are the ability of evolving 2nd generation systems to achieve the necessary
radio capacities and transaction processing throughput to meet continuing demand.

However, personal communications are likely to be, at least initially, more of a
marketing concept, linked more . to the services that will be offered, than to a
technical definition of networks and technologies. Significant effort must however
be put into allowing service provision and combination of services to evolve freely

to ensure success.

As there is unlikely to be a single user profile against which suppliers can build
personal communications products and services, it will be essential to adopt
structures which provide the freedom of operation to identify and respond
effectively to the servic1e needs of the different customer groupings - made up of
both individuals and organisations - who will define the various personal
communications market segments.

Free,entry into the provi[sion/retailing of mobile communications services, allowing
service providers commercial autonomy to trade throughout the Union, would be an
essential step in this direction. The earlier provision of benefits resulting from more
rapid take-up of mobile services would be transferred across Europe, significantly

95

ass1stmg with pan-European servtce goals and wider economic and social
development in Europe. Such service providers, independent or integrated into
network operations, with the necessary safeguards, would, for example, be able to
assist with roaming facilities for business and leisure travel abroad.

A major consequence of an open environment for service provision both via mobile
and fixed networks could be the emergence of new telecommunications players to
exploit the opportunities of personal communications and synergies with activities
in other sectors such as the media, travel and automotive industries. As a result,
diverse methods of retailing and distribution of personal communications services
and products could be expected to be introduced.

The appearance of integrated service providers who could provide tailored service
packages based on voice telephony offerings from both fixed and mobile network
operators, would serve to a significant extent to bring about a convergence of
personal communications services over the range of different networking platforms.
Integrated service provision could be fully enabled,from 1998 onwards, according
to the schedule for liberalisation of public voice telephony service set out by the

Council in July 1993.

The full benefits of convergence are, however, only likely to ~e felt by users once
they can conveniently access personal communications services offered over fixed
and mobile networks, via both wireline and wireless access in both public and
private domains. The ability to employ a single personal number and maintain a
service profile across environments will be core aspects of this. In this respect,
smartcards and multi-mode 'personal communicators' may well turn out to be key
elements of future development.

The availability of such capabilities will depend heavily on access to intelligent
functionality and sharing of information across different networking environments.
The development of shared intelligence therefore stands out as the major networking
requirement of the integrated personal communications environment.

96

5. CONCLUSIONS

_A wide range_ _of_ _services and systems have been developed in response to different_
_market requirements_

European industry has developed a wide range of leading digital mobile systems,
such as in cellular, paging, PMR and dedicated mobile data systems aimed at
different market segme:nts, offering advanced services and signifiGant market
potential.

In each of these areas, second-generation digital technology is now or will shortly
be available representing a major advance on first-generation analogue systems, in
terms of improved cost and performance as well as greater capacity and new
functionality.

_Mobile growth rates are the highest across the telecommunications sector_

The new digital mobile systems - and particularly Europe's flagship, GSM, - offer
still higher growth potential. Mobile communications is the fastest growing area of
telecommunications. Tite total user base for the three most established mobile

services, which are stilll based on analogue systems grew by over 20% in 1991.
Cellular growth consistently exceeds expectations, and it now accounts for greater
than 50% of the total mobile user base, wit.11 recent months producing record levels
of new subscriptions.

Currently, the European marketplace is still dominated by the installed base of
analogue subscribers; however, following the widespread deployment of digital
systems, new growth will be based on digital systems.

With 95% of cellular mobile traffic currently to and from PSTN subscribers, the
growth in mobile communications also generates substantial revenue and growth· for
fixed network operators.

_Mobile has set the_ _pace/or_ _innovation_

A strong record of technological innovation is evidenced by European leadership in

~e development of 2nd-generation European digital systems, in particular, the
Global System for Mobile communications (GSM) and the development of microcellular systems such as DCS-1800, as well as cordless and public access
technologies such as DECT - all of them likely to be major components of the
wireless part of future personal communications. The development of mobile handheld 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 typeapproval, and efficient and timely administrative mechanisms for coordinating
frequencies and type approval are essential.

_The strategy with regard to introduction_ _of_ _DCS_ _1800 remains fragmented._

DCS 1800 will become a major base technology for micro-cellular systems and
therefore for the wireless part of personal communications services.

98

So far, decisions to implement DCS 1800 networks have been taken in only four
Member States. At present, availability of frequencies for such services is not being
effectively coordinated. The situation with regard to DCS 1800 is thus extremely
fragmented and represents a major risk with regard to European market expansion
in the base technology for personal communications.

_The major challenge now is to open development_ _for_ _combined service offerings across_
_the range_ _of_ _different technologies and across the Community._

Within the mobile area, a variety of networks and services are growing in an
uncoordinated way. The structures introduced for development of mobile
communications in Member States have promoted a separation of the supply of
different mobile services, and this has tended to impede the exploitation of synergies
between different services for those users who would benefit from their combined

use - a major pre-condition for personal communications services.

There is therefore a need to remove structural impediments within the mobile area
in order to allow the full market opportunities for combined offering of services to
be realised.     

Furthennore, services an: beginning to be offered in similar ways on both fixed and
mobile networks. The activities of mobile service providers shows similarities with
calling card service providers in the fixed area; both are recruiting, managing and
billing subscribers and are entering into wholesale/retail-type arrangements with
network operators.

Full freedom for convergence to occur at the service provision and user levels will
provide for greater innovation, and will allow the full range of market opportunities
for personal communications to be exploited.

_Flexibility_ _of_ _entry_ _for_ _both_ _fixed_ _and mobile operators required._

Once the provision of public voice service via the fixed network is fully liberalized
in line with the time schedule agreed by Council, it is essential that future-oriented
policies do not maintain artificial barriers which might otherwise be broken down
by market and technology developments.

Flexibility of entry across the range of fixed and mobile operations is now required
to fully realise the potential of personal communications.

_High mobility, low mobility and.fixed services are likely to play complementary roles._

Different market needs can be served with different services at different costs.

Market segmentation will be the key to folly exploiting the potential of personal
communications, and therefore it is essential that freedom exists to adjust to the
requirements of different customer groups who define the various market segments.

99

_The overall challenge is the development towards the personal communications_
_environment._

Telecommunication users will increasingly require mobility and person-to-person
calling instead of terminal-to-terminal calling, i.e. full scale personal
conununications including personal numbering. Users will not be concerned with
the supporting technology but with the services offered and parameters such as
price, availability, reliability, quality and ease of use. In order to allow these
requirements to be met, the right regulatory conditions must be established. These
must be based on increasing flexibility, the freedom to optimize system and service
operations, and must allow for market operations.

100

Towards the Personal Communications Environment:

Green Paper on. a common approach in the field of

mobile and personal communications in the European Union

ANNEXB

ANAl,YSIS OF THE

ENVIRONMENT IN EUROPE

FOR FUTURE

DEVELOPMENT

101

TABLE OF CONTENTS

1. CURRENT REGULA TORY STRUCTURE ............................................................... 104

1. 1 Basic regulatory structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 04

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

1.3 Public mobile communications ............................................................................. 107

1. 4 Private mobile communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 0

2. LICENCES AND TYPE APPROVAL ........................................................................ 110

2 .1 Overview of licensing in the European Union . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . .. . .. .. .. . . . . . . . . .. I I 0

2.2 The major criteria applied in existing licences ......................................................... 111

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

2.4 Terminal and subscriber identification, and related databases and
arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 14

3. INTERCONNECTION AND INTEROPERABILITY ............................................... 115

3. 1 The basic role of interconnection................................................. . . . . . . . . . . . . . . . . . . . . . . . . . . I 15

3 .2 Analysis of interface requirements between different operators ............................... 115

3.3 Interoperability, inter-working and roaming ........................................................... 119

3.4 Pan-European clearing mechanisms ....................................................................... 122

3 .5 The vital interfaces: fixed network/mobile operator and mobile
operator/service provider ...................................................................................... l 22

4. STANDARDS ............................................................................................................... 123

4.1 The role of the European Telecommunications Standards Institute (ETSI) ............. 123

4.2 The Universal Mobile Telecommunications System (UMTS) - standards for
third-generation systems ........................................................................................ 123

5. FREQUENCIES ........... _ ................................................................................................ 124

5. I The Fundamental role of Frequencies .................................................................... 124

102

5.2 The role of the ERC and ERO ............................................................................... 126

5. 3 Future frequency allocations for terrestrial mobile and personal
conununications, and satellite-based mobile and personal communications ............. 127

5.4 Future co-ordination issues in Europe .................................................................... 129

6. NUMBERING .............................................................................................................. 129

6.1 The new requirements for numbering ..................................................................... 129

6.2 The personal telephone number and universal personal telecommunications
(UPT) ................................................................................................................... 130

6. 3 The requirements for numbering coordination and the future role of ECTRA ......... 13 0

7. PROTECTION OF PRIVACY AND DATA PROTECTION .................................... 131

7 .1 The new requirements for protection of privacy ..................................................... 131

7. 2 Current measures in the: Member States ................................................................. 13 2

8. SAFETY AND ENVIRONMENTAL CONSIDERATIONS ...................................... 133

8.1 The issue of electromagnetic compatibility and electromagnetic exposure ............... 133

8 .2 The issue of access to siuitable sites and environmental aspects .............................. 134

8. 3 Sharing of infrastructure....................................................................................... 13 4

9. THE FUTURE PERSONAL COMMUNICATIONS ENVIRONMENT:

MOBILITY IN THE FIXED AND WIRELESS NETWORKS ................................. 135

9.1 Current fragmentation through separate licences .................................................... 135

9.2 The pan-European dimension ................................................................................ 135

9.3 The new environment set by the Telecommunications Review ................................ 136

10. CONCLUSIONS .......................................................................................................... 137

103

ANALYSIS OF TllE ENVIRONMENT IN EUROPE FOR FUTURE
DEVELOPMENT

1. CURRENT REGULA TORY STRUCTURE

1.1 Basic regulatory structure

In most Member States, Telecommunication Organisations were during the 1980s
given an automatic and mostly exclusive right to provide mobile services (paging
and analogue cellular telephony). The introduction of new teclmologies, together
with in some cases the limited success of the monopoly provision of services, has
since led Member States to reassess their basic approach and to move towards
substantial competitive provision [1] . This reflects the general trend, pushed by a
combination of technological advances, market demand and regulatory changes [2],
towards more liberalised telecommunications services on both a global and
3
European level .

Exhibit Bl summarises the situation regarding licences currently allocated or
planned in the European Union for the main areas of mobile communications.

Analogue mobile telephony services are competitively provided only in France and the United Kingdom. \\'hilst
GSM, is generally emerging on the basis of a duopoly.

2 The mobile field was specifically set aside by the Conunission's 1987 Green Paper on Tckcommunications,
COM(87)290 final, 30.06.87 for special consideration. Member States have, however, inteqm.!kd the
liberalisation trends set in the 1987 Green Paper in developing national policy for mobik conununications

3 For details on the regulatory situation in the Conununity, see in particular "Licensing and declaration
procedures for mobile conununications in Member States of the European Conununity'', Report to the

Conunission of the European Conmmnities prepared by Stanbrook & Hooper and KPMG Peat Marwick,

August 1993

104

Exhibit Bl : Licences allocated or planned for European mobile communications

.......,," - llil1~1,~i~~lli'flt1ilill~i ~~iiijlll~~ r ~~lil11iL1il~~ t ~~llll[i[lii1~~ li1tl!

- llil1~1,~i~~lli'flt1i ~~____~~ ~~]~~ lill~i ~~iiijlll~~ r ~~lil11iL1il~~ t ~~llll[i[lii1~~
### _ [ - - - -I I -1- I IMttHtkFkJ _,_ r·--==i i r·- -·=i l I 

           -            -            -I I I I
I II II I I I W I 1 ~~1Cu--=i11~~ ~~l~~
-.r--- I
._, I
###### _:.-_
### -I I _,_ 
## -- 

      ###### _,I I II C llltJtiil@ttHll
#### 
~~-~~
~~I~~ ~~l~~ l ~~l~~ ~~--1~~
#### I I

~ .....

B

DK

D

GR

E

F

IRL

L

NL

p

###### _:.-_
### _,_ - 
   I II C llltJtiil@ttHll l

~~-~~
~~I~~ ~~l~~ l ~~l~~ ~~--1~~

uK ~~1c~~ ~~-~~ ~~--ic~~ ___ ~~-~~ ~~ir---11r-- - 11c~~ ~~11~~ 111 111 ~~1~~

Key: - 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.

Note:

Source:

'llte table does not include licences awarded or planned for the digital paging
system ERMES by a nwnber of Member States.

CEC Studies

A number vf current general characteristics of the Union's mobile markets can be
identified:

          - Member States have traditionally taken a technology, rather than a servicebased approach, with each new technology being seen as a separate market and
being subject to separate licensing procedures (paging, cellular etc.). Separate
licensing often prevents operators from offering different mobile services,
despite the economies of scale or scope that could be achieved.

          - In granting licences, preference has often been given to the existing TO, though
in certain cases with a requirement for it to provide its services through a
structurally separate subsidiary.

          - Only the provision of mobile terminal equipment, following the 1988 Terminal
Equipment Directive [4], is fully open to competitive provision in all Member
States.

          - In many cases restrictions on mobile network operators still oblige them to lease
fixed link infrastructure from TOs rather than allow them to self-provide
infrastructure where this would be economically attractive.

          - Mobile services in the Community are provided on a regional or national basis.
There are no pan-European mobile operators and hardly any pan-European
servi-;e providers.

          - Where new technologies (e.g. GSM) permit pan-European roaming this occurs
mostly on the basis of one stop shopping and billing service arrangements
between existing national operators. Services are provided over national rather
than pan-European infrastructure, with much of the call being routed over the
fixed networks of the TOs.

1.2 Relationships between market participants

The reference model depicted in ·Exhibit B2 highlights the main commercial
relationships between the organisations involved in providing mobile services. This
model is generically applicable to all types of mobile market irrespective of
variations in competitive structure between countries, or of differences between
mobile services.

Each link shows a commercial relationship between two players which might
require physical interconnection of networks, the linking of other facilities (e.g. for
transferring call records), or the supply of infrastructure or other services.

Two or more of these roles may be integrated within a single organisation which, in
some instances, also possesses fixed voice telephony and infrastructure rights.
Fixed and mobile networks may be run by different business units in the same
organisation, but this is not always the case. Similarly, the roles of mobile network
operator and service provider (which recruits and manages the subscriber base) are
often performed by the same organisation, which might be a business unit .within a
TO, or an independent mobile operator.

4 88/301/EEC, OJ L13 l, 27.05.88, p 73

106

Where one part of an integrated organisation operates under special or exclusive
rights whilst providing network access or other services to another part of the same
company which is facing competition from newly-licensed operators or service
providers, these independent players may require the same range of access
arrangements or services in order to be competitive.

Requirements for open, efficient and fair access are therefore potentially applicable
to any of the comme:rcial relationships shown in Exhibit B2 in which. competing
organisations rely for all or part of their service on facilities provided by another
market participant with special or exclusive rights or with a strong market position.

**1.3** **Public mobile communications**

_Analogue cellular_

There are competing analogue cellular telephony operators only in the United
Kingdom and Franc~~- In the rest of the Community analogue cellular mobile
services are provided by the existing TO, generally on the basis of their statutory
monopolies with relatively few specific conditions imposed upon them. Formal
licensing was not carried out.

In the UK and France:, competition with the TO has been limited to a single private
sector operator responding to a tendering procedure. In the UK BT was required to
enter the mobile market only by means of an arms length subsidiary, Cellnet, which
was established with a major private sector shareholder.

In the United Kingdom, a wholesale/retail arrangement was introduced by expressly
prohibiting analogue cellular network operators from selling services or equipment
directly to users. Instead, mobile service providers were introduced who \:vould
purchase airtime from the cellular network operators at wholesale rates for resale to
individual subscribers. Restrictions on direct sales have subsequently been removed
through licence modifications with effect from January 1994.

_GSM_ _(Global System_ _for_ _Mobile communications)_

In contrast to analogue cellular, current planning for commercial development of
cellular communications in 11 Member States supports two GSM operators (see
Exhibit B 1).

A public/private duopoly (with the private operator selected by tender) has been
established or is foreseen in the majority of these Member States [5], with a privateprivate 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
INFRASTRUCTURE

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 ('Bibop') 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 operator [8 ] 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 out [9], 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 3050% 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
.d . . 11
operator can provi e its services.        

_Licence duration_

Licence duration varies: both from country to country and from service to service, as
Member States have attempted to balance the need for a stable regulatory
environment encouraging long-term investment, with the needs to meet user demand
and promote effective service delivery and efficient use of the frequency spectrum.

Many of the analogue mobile telephony systems were not subject to formal
licensing procedures. GSM licences vary in duration from 5 years (renewable) in
Denmark to 25 years in the United Kingdom.

Analogue paging 1icences vary from a minimum of 10 years to a maximum of 30
years (both found in Spain),

P AMR licences vary depending on whether it is for a national or regional service.
In the UK the national licence is valid for 25 years, whilst regional licences are
generally for an initial 6 month period. In Spain licences vary between 10 and 30
years, whilst in many other countries, PMR licences are granted. on a yearly
renewable basis.

An additional factor is that licences do not necessarily start at the same time, which
allows the TO considerable lead time in which to establish itself in the market.

10 In Gemmny, D2 is obliged to use the GSM standard, preventing it from adapting its service, for example, to
incorporate the DECT interfaces, whilst DI does not face any similar restriction., making its GSM investment
more profitable.   

11 In the UK, analogue and GSM operators were initially prevented from providing service except through an
am1's length subsidiary. The UK refrained from imposing a similar condition when licensing DCS-1800/PCN
services, though conditions to ensure no discrimination vis-a-vis third party service providers were included in
the licence conditions. The restriction on GSM operators was lift€?d from I January 1994, reflecting the
relatively mature development of the Gellular market in the United Kingdom. In Germany D2 may not provide
the full range of GSM services, as agreed in the Memorandum of Understanding establishing the GSM
standard, (for example, D2 cannot provide short messaging services).

113

_Changes in ownership_

Some licences contain restrictions on changes of ownership without the approval of
the licensing authority (or at least make such changes grounds for the revocation of
such licences). The limits are often linked to the acquisition of share holdings of
25% or more, as that gives specific voting rights under the company law of most
Member States.

Such restrictions may limit the ability of mobile operators to attract outside capital
and expertise, but also act as a brake on the creation of a ·market for mobile
operating licenses.

2.3 Type approval, interim type approval and mutual recognition of type approval

Prior to the full application of Council Directive 9 l/236/EEC [12 ] due to delays in
establishing the required Common Technical Regulations (CTRs), an interim type
approval (IT A) scheme was instigated in 1991 to avoid impacting GSM
introduction. According to the terms of adoption of the CTRs, the confonnance of
terminals approved according to the IT A scheme must be ensured before 1995.

On 28 September 1993, the first two CTRs were adopted under the Directive, CTR
05 and CTR 09, relating to type approval of terminals for the pan-European digital
cellular system GSM.

2.4 Terminal and subscriber identification, and related databases and
arrangements

When a subscriber logs on to a GSM network (by switching on a GSM tem1inal or
inserting a SIM-card), both terminal and user are verif1ed by means of database
lookup transactions. This allows yerification of whether the tem1iual is 'blacklisted', 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 SIMcard can be used.

The infom1ation required for checking the terminal Equipment Identification
Number (EIN) number and the subscriber profile are held in databases located
within the user's 'home' network. Commercial agreements between operators
support access to and use of such data by different operators.

The conditions for access to and control of such databases are becoming more and
more critical for the future development of the sector.

12 Council Directive of 29 April 1991 on the approximation of the laws of the Member States concerning
teleconununications tenninal equipment, including the mutual recognition of their confonnity ( 91 /263/EEC: OJ

Ll28/l, 23.05.91)

114

3. INTERCONNECTION AND INTEROPERABILITY

3.1 The basic role of interconnection

Interconnection arrangements, which provide new market entrants with access to
the subscriber base of <~stablished network operators, are one of the most crucial
factors governing the growth of competitive services.

Regulation of interconnection arrangements is a key tool for managing the
introduction of compe:tition in telecommunications markets. . The extent of
regulatory involvement varies significantly from country to country, reflecting the
underlying attitude towards competition. Some countries have set interconnections
terms _a priori,_ others have preferred to act as 'referees', only becoming involved if
the parties could not agrne among themselves.

3.2 Analysis of interface requirements between different operators

_Requirements_ _of_ _public_ _mobile_ _telephony_ _operators_ _Fixed/mobile_
_interconnection_

Mobile telephone network operators rely very heavily on the public fixed network
infrastructure. In commercial terms, the fees paid by mobile operators for
interconnection to the fixed network typically account for 30-50% of their total

revenues.

This arises from two main components: Typically 95% of calls on mobile networks
originate or terminate on the fixed network in European countries with developed
telecommunications infrastructures. The moOile operator has to pay an
interconnection fee for the handling of this traffic and conveyance of calls to~from
final destinations/origins of the calls via the fixed network.

The second main component is the transmission infrastructure needed by the mobile
network operator to connect base stations to mobile switching centres (MSCs) and
for the interconnection of MSCs. In most Member States this takes the form of
circuits leased from the fixed network operator.

The key issues for a mobile network operator seeking interconnection to the public
switched network are in the following areas:

         - Number and location of interface points.

Where a mobile network operator has full territorial coverage, It IS in the
interests of the mobile network operator to have fl,exibility in t~1e number and
location of points of interconnection to other networks. This allows the- mobile
operator to choose the optimum (i.e. most profitable) routing for outgoing
traffic from his network.

Normally a mobile network operator would choose to carry traffic on its own
network as far as possible, handing it over to the fixed network at a point close
to the destination customer. In this way, the mobile operator has the maximum
control of its own costs.

115

                                 

          - Technical interface characteristics.

It is important for the efficient operation of the mobile system that the mobile
network is connected at a 'trunk' level to the public switched network. Normally
this means a non-standard interface specially engineered for the mobile
operator. Relevant technical aspects of the interface include:

interface specification for physical interconnection

transmission and signalling standards to be supported

circuit capacity between the networks

advanced facilities to be supported (call forwarding, freephone, calling
line identification etc.)

The GSM standard raises some specific technical issues with regard, m
particular, to signalling standards.

          - Management and administrative links. The mobile network operator needs
access to the management and administrative systems of the fixed network
operator for billing, maintenance, directory services etc.

          - Supply and usage conditions. Mutually agreed supply and usage conditions
need to cover such matters as provisioning times for interconnect circuits;
quality-of-service targets; contingency procedures; procedures for intenvorking;
routing principles; duration of agreements; compensation claims;

          - Prices, normally include:

a one off interconnect payment to cover engineering work

recurrent interconnect charges based on the number of interconnect
ports used

traffic related charges (conveyance of calls), including volume
discounts

charges for advanced facilities (e.g. freephone or premium rate calls)
and for shared facilities (e.g. operator, emergency and directory
services)

Clearly, the absolute level of these charges is of paramount importance for the
mobile network operator. There is also a point of principle .. Where these
charges.include a contribution towards the cosi of universal service obligations
placed on the fixed network operator, such contributions should be transparent,

bas~d p
3 [n objective criteria and be fairly shared· by' all participants ] [in ] [the ]
market .

13 This is an issue of general concern in the context of interconnection arrangements and access charges. It is to
be reviewed by the Commission according to the Council Resolution of 7 February 1 994 on the maintenance

and development of universal service in a competitive environment in preparation for the general adjustment or

                                                            

116

          - Numbering. The mobile network operator needs a suitable allocation of number
ranges, access code:s and service prefixes.

_Requirements_ _of_ _Private mobile operators_

Private mobile systems are either not connected to the public telecommunications
system or else, where they are connected, use standard public network interfaces.

In some cases, minor enhancement of a standard network interface may be
desirable, in particular, to allow for the transfer of network management
information.

The issue of interconnection with the public fixed network will be become more and
more a critical issue for the future development of Private Mobile Radio, in
particular future PAMR systems.

                                    _Requirements_ _of_ _mobile telephony operators_ _transmission infrastructure_

Mobile network operators need transmission links within the mobile network quite
distinct from any interc(>nnection to the public switched network. These are pointto-point links between base stations and mobile switching centres and between

MS Cs.

In the UK, Germany, the Netherlands and Greece [14], mobile operators have the right
to provide their own infrastructure links nationally. In other Member States, mobile
operators must use lines leased from the fixed network operator.

_Requirements_ _for_ _mobile/mobile network interconnection_

Mobile/mobile interco1mection covers several different situations:

         - Inter-operator roaming between nationally based systems.

Interconnection between national mobile networks allows users to roam at a
national level between operators. The possible benefits for users are improved
service, availability and coverage. For new entrants, this may provide a rapid
means of becoming 1established in the market by taking advantage of an existing
network. There is the further possibility of gains in spectrum efficiency through
sharing of frequency channels

         - Direct connection of mobile networks

Direct interconnection between mobile networks allows the operators to pass
mobile-mobile traffic without the cost of interconnect fees for use of the fixed

regulatory conditions for the full liberalisation of public voice service by I January 1998 (with additional
transition periods of 5 years for Greiece, Spain, Portugal and Ireland and where justified 2 years for
Luxembourg). Proposals concerning this adjustment are to be submitted by the Commission by I January 1996
(see Council Resolution of7 February 1994 on universal service, to be published).

14 France has allowed use of own infrastructure by its second public cellular operator from I January 1994

onwards.

117

network. At present it is estimated that mobile to mobile calls do not exceed
about 5 % of the ~otal traffic, but this. is bound-to grow.

- Interconnection of dissimilar mobile networks

The main motivation of this type of service is to improve service availability
and to offer new facilities to users. Call diversion from a cellular terminal to a
paging service is one example.

Another reason would be to facilitate the migration of analogue subscribers to
GSM. An operator of both analogue and GSM systems will want their two sets
of subscribers to be able to communicate.

Increasing user demand for service integration, and the technological convergence
betWeen fixed and mobile services, point to a growing need for mobile to mobile
interconnection.

The current barriers are:

- _Regulatory._ Some regulatory barriers preventing direct interconnection were
put in place to allow new entrants to establish themselves in the . market. Once
new entrants are established, these barriers should disappear. Others are there
to protect the special and exclusive rights of the established fixed network
operators.

- _Technical._ Incompatibilities between, for example, the technologies of first
generation analogue cellular systems make interconnection technically difficult.
Technical difficulties are rarely insurmountable and can be overcome if
regulation allows it.

_Requirements_ _of_ _mobile service_ _12.roviders_

A service provider in this context is the organisation responsible for some or all of
the functions of managing the subscriber (including recruitment, registration, billing
and accounting, customer support), airtime reselling, providing enhanced services,
(both network embedded, for example, CLI - Calling Line Identification and
peripheral, for example, voice mailbox), and terminal provision.

The service provider function relies on support from the mobile operator, which
could include:

- provision of billing and call accounting information

- provision of details of new services (launch dates, tariffs etc.)

- allocation of number bloc~s

- access to network management facilities to check network status in response to
customer queries/complaints

- provision of directory services

- access to administrative systems for registration of new customers

118

      - provision of details of defective terminals

The relationship between a service provider and a mobile operator is one of the
most important issues: for mobile communications, along with the relationship
between the mobile network operator and the fixed network operator.

Many of the issues are similar to those at the interface between the fixed and mobile
network, and arise from the need to ensure fair competition when a mobile operator
is also a service provider in competition with other service providers i.e. non
discrimination, equality of access, supply and usage conditions.

It should be noted however that this interface is in most cases an

administrative/management interface; it may involve the computer systems of the
service provider accessing the computer systems of the mobile operator over a
physical link, but it does not generally involve the physical interconnection of
networks.

_Requirements_ _(Or_ _other operators_

The key interfaces concerning telepoint are the air interface between the tem1inal
and the Telepoint system, and the interface between the Telepoint system and the
fixed public network.

The main priority for paging services is a range of fixed network interfaces to allow
users to input paging messages in the most convenient and cost effective way
(PSTN, leased line, PSDS, mobile etc.). As paging is a unidirectional service, these
are basic transmission and signalling interfaces and there is less requirement for
links which support billing or network management functions. There is some
demand for inter-system roaming, but the need for roaming interfaces is presently
still not a priority for paging systems.

3.3 Interoperability, inter·-working and roaming

The twin forces of market demand and technological innovation are both pointing
towards the same long-term goal - full mobility for the telecommunications user,
who will make use of mobile and/or fixed networks as appropriate, and in most
cases will be unaware of the underlying network technology. Achieving such
interoperability at a European level will be a powerful cohesive influence within the
Union.

The European citizen will be able to travel throughout the EU, and by inserting his
or her smart card in a fixed or portable telephone will be able to make and receive
calls anywhere in the Union.

Two essentials for the rapid deployment of Union-wide services are:

      - services providers offering services on a Union-wide basis, building their
services upon the mobile networks provided in each Member State

      - removal of restrictions on mobile operators to interconnect their networks with
each other or with the fixed networks in their own or other Member States

Most mobile services, like their predecessors the fixed network services, gre\v up as
nationally based services. Union-wide operation was either not considered or came

119

only as an afterthought. In the cellular area, for example, Europe has a variety of
first generation analogue cellular systems introduced in the 1980s which are based
on incompatible technical standards which prevent interoperability.

Technical compatibility is a necessary but not sufficient condition to allow users to
"roam" between networks [15] . 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)

~ a a a w ~ ~ ~ ~ 5 < ~ ~ z ~ a
g _
_M_ ~
~~       - ~ c 8 .::: c ~
0 8 c: c: 8.o =                         - - 0 8 = ~ c: c:                         - = (,J ~ ~ 0 v c: G>                         - r: 8 c ..... c: os                         - - .Q ~ = ... =- os                         - - .g ~
;; -E _Q_ ::s ~ -E s                      - e                      - ~ ~ Q:i iE 0 o 8 ~                      - s: 8. ~

                       ~ g ~ ~ = ~ ~ ~ ~ ~ ~ ~ ~ i2; ~ :§ ~       - ~ :c· ~ ~ ~       - s _e_ ~ ~
~ o ~ G>~ =~ ~ ~·=~~~;:; ~ ~ o~ G> =~ G> G> o ::s G>~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ u        - ~ ~ ~ .~ ~ z u ~ ~ ~
Belgacom B ft? X X X
Sonofon DK {/{ X X X X X X X X X X X° X X X X X
TeleDanmark ill1] X X X X X X X X X X X X X
DeTeMobil Dl D x x x ttr x x x x x x x x

Mannesmann D2 X X X 1 \ } ) : X X X X 1 X X X · X X X X X X

Mannesmann D2 X X X 1 \ } ) : X X X X 1 X X X · X X X X X X

Panafon GR _}}(_
Stet _}}/}_

T<•ll'fonica F I : : :
E ltlnl'rl!i -- 1: X x·1---·i--t--+:::-:::·"" __,_X_L_, 1_ X X X _XL~

1

~ ......

U SFJ< X X X _{(._ X X X X
Eirccll JRL X I/\) X X
SIP I X X X X X ::) X X X X X X X X
P& T L X X X _})}_ X
PTT Telecom NL _,})}_
TMN p x I \ ) \ x x x x x
Tclcccl X X X ltf\' X X X X X X
Cell net UK Jtf
Vodafone X X X X 1 X ill X X X X X X _X_
PTV A tfl
Telecom Finland SF X X I X X X X X X X Hi/ X X X X X

Radiolinja X X X X X X _(@)_ X X X X X
E P&T IS _ft?_

F Tclcmobil · N X X X X X X X X X }{f X X X X
T Nctcom lt?J X

I A Comvik S X X X X X X X X X X X X X X X lt?:H X

I Eu~opolita.n X X I X X X I X X X X X X. X lll :·:·:·:·:.:·:·: X
Teha Mob1tcl X X X X X X X X X X X X, X ::::::::::::::: X
PTT CH X X X X X X X X X X X X X X X X X Ji{
Notes: 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 interfaces: fixed network/mobile operator and mobile
operator/service provider

From the discussion above, two interfaces emerge as vital for the future
development of mobile systems:

      - the interface between the fixed network and the mobile network

      - the interface between the mobile operator and the service provider.

Regulatory principles for these interfaces are necessary for two reasons:

      - both are bottle-necks, as service providers will have limited choice of mobile
operators from whom to take services, and mobile operators face a limited
choice of infrastructure providers/fixed network operators.

      - vertical integration, allowing the same organisation to be a fixed network
operator, a mobile network operator and a mobile service provider could distort
competition unless regulatory safeguards are put in place.

122

4. STANDARDS

4.1 The role of the Europe:an Telecommunications Standards Institute (ETSI)

All the most significant European standards in the mobile arena have been produced
by the European Telecommunications Standards Institute, 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.

The ETSI Teclmical Assembly (TA) has final responsibility for the standardisation work. It decides on the
standardisation work programmes, and the establislm1ent of Teclmical Conunittees (TCs) and Project Teams
which progress the standards work.

The Conunission has concluded a framework contract with ETSI and entnists sta1~dardisation mandates to

ETSI in the framework of Community Telecommunications legislati_on, in particular Directive 91/263/EEC
concerning mutual recognition of type approval of tefll}inal equipment and establislmlent of required European
Teleconununications Standards (ETSs) ~d the related Common' Technical Regulations (CTRs), and Directive
90/387 /EEC concerning implementation of Open Network Provision .

A similar arrangement has been concluded with CEN/CENELEC. This arrangement allows the Conunission to
entrust standardisation mandates for the establislmlent of European standards generally in the electrotechnical
field, such as in the field of electromagnetic compatibility.

123

5. FREQUENCIES

5.1 The Fundamental role of Frequencies

All radio devices communicate through the transmission and reception of energy.
This energy is transmitted within the radio-frequency part of the electromagnetic
spectrum.

The amount of spectrum available for mobile radio is limited .and requires careful
management. The range suitable for most mobile applications lies between about

100 MHz and 3 GHz. The limits of use are set by radio propagation factors and
other technical criteria. Manufacturing difficulties limit the extent to which the
higher frequencies can currently be used.

Exhibit B4 gives an indicative overview of spectrum use for mobile
communications in Europe.

According to the studies carried out, in the range below 1000 MHz (lGHz)
currently some 14% of radiofrequency spectrum are allocated to public mobile
communications services. In accordance with the decisions taken at WARC 92 (see
below), substantial additional frequency resources will be allocated in the range
1 GHz to 3GHz for both terrestrial and satellite-based mobile communications
services. This concerns primarily terrestrial digital mobile systems which will
become available in the immediate future and which are central to future
development of key technologies (DCS-1800; DECT; TFTS; see annex A for
further detail), as well as radiofrequencies for UMTS. In the field of satellite
mobile communications, this concerns the future satellite-based personal
conununications services, including the Low Earth Orbiting Satellite systems
(LEOs).

In Europe, Council Directives relating to frequency designations for key panEuropean 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 subbands may differ between countries, except those harmonised bands to be found listed below. For precise
information, reference should be made to national frequency plans.

Frequency Range Systems

47 - 88 w-Iz CT 1, Paging, PMR, MOBITEX

138 - 174 w-Iz first PLMN's 1, RC2000, PMR, P AMR
(MPT 1327), ERMES, Paging2, MOBITEX

3 80 - 400 w-Iz TETRA3

420 - 470 w-Iz RC2000, NMT450, System C, RTMS, P.MR
Paging

862 - 960 w-Iz T ACS, ET ACS, NMT 900, GSM, DSRR,
CT2,PMR

1670 - 1900 MHz TFTS4, DCS 18001, DECT

1885 - 2200 MHz FPLMTS/UMTS(note 1.4)

5795 - 5815 MHz RTT

63 -64 GHz RTT

76 - 77 GHz RTT

Harmonised bands:

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 cooperation of the Community with ETSI. ERC also intends to enter into Memoranda
of Understanding with the European Free 'Trade Association (EFT A), as well as
with ETSI.

In 1992, the ERC created a new instrument for coordination of radiofrequencies
and the provision of harmonised frequency bands, the so called ERC Decisions.
Council Resolution 92/C3l8/01 has called for using ERC Decisions as the primary
method for future coordination of radiofrequencies in Europe [18] .. In its
Communication of 10 September 1993, the Commission has set forth the necessary
conditions to ensure that the Union's interests are safeguarded in this context [19 ] (see
Annex D).

18 Council Resolution of 19th November 1992 on the implementation in the Community of the European
Radiocommunications Committee decisions (92/C 318/01~ OJ C318/l, 04.12.92)

19 See "A new approach to the coordination of radiofrequencies in the Community", Conununication from the
Commission concerning proposal for a Council Decision on the implementation by the Member States of

126

Since 1992, the ERC has adopted ERC Decisions concerning the designation of
radiofrequencies for the Terrestrial Flight Telecommunications System (TFTS),
Road Transport Telematics [20 ] and Digital Short Range Radio (DSRR).

5.3 Future frequency allocations for terrestrial mobile and personal
communications, and satellite-based mobile and personal communications.

A principal task of the ITU World Administrative Radio Conference held in 1992 at
Torremolinos (WARC 92) was to extend allocated bands for mobile services,
including the satellite mobile services. Exhibit BS shows the frequency allocations
made at W ARC 92 relevant to the mobile communications area.

Based on a range of design assumptions and estimates of penetration and traffic for
dense use in large cities, CCIR calculated prior to W ARC '92 that
UMTS/FPLMTS would need some 227 MHz of spectrum. At W ARC '92 a total
of 230 MHz between 1 :&85 and 2200 MHz was designated for world-wide use,
eventually in FPLMTS implementations.

Within this, 2 x 30 MHz were identified for the satellite mobile services. However,
this allocation is to take effect in Region 1 (including Europe) only by the year
2005. In the United States of America, this will operate already from 1996
onwards.

The regulations established at W ARC '92 permit other systems and services to
. share the FPLMTS bands and contain no directions concemmg priorities for
satellite or terrestrial elements in the extension bands.

A number of smaller allocations were also made to the MSS (Mobile Satellite
Services) at around 2,500 MHz and 1626 MHz, at around 400 MHz and around

140 MHz, amounting to a total satellite bandwidth of about 2 x 66 MHz. However,
the conference· failed to make any specific provision for feeder link applications to
thes·e satellite bands, generally because of the assumption that they will be carried
by the Fixed Sat~llite Service. Proble~s, are likely to arise unless some effort is
made to identify bands, expansion bands and appropriate measures to permit
sharing of the feeder links.

measures concerning radiofrequencies, COM(93)382, 10.9.93. See also Council Conclusions of7th December

1993.

20 These two ERC Decision have replaced the original proposals by the Commission for Council Directives
designating frequencies for this system.

127

Exhibit BS: Additional frequency allocations relevant

to mobile communications following WARC 1992

(Jb.e•.•••1Q92·.••World····Achniriistative .. - ·•Radio Confererice.>:(\\'f\R:G. :9:21•• allocated•• frequenci¢s·••••p#Hf - .

<<\\'<?rlciwd~ andregional [1 ] basis for< a range of currentfillp em~rgil1g radio services. Arii<>µtjfu~.
surnfrtarY of allocations is reproduced below. - 

.·                                                                                                                                                                - ....                                                                                                                                                                - .·

Terrestrial mobile
(inc. FLMTS).

Satellite mobile [2 ]

Low Earth Orbit

Satellites

Aeronautical

Communications

Worldwide
Region 2 [3 ]
Worldwide

World\\ide
Region 2 [4 ]

World\\ide

Worldwidc-3

World\\idc-3
World,\ide

Worldwide

1885-2025 MHz; 2110-2200 MHz.

1626.5-1660.5 MHz (u); 1525-1559 MHz (d);
1930-1970 MHz (u); 2120-2160 MHz (d);
1980-2010 MHz (u); 2170-2200 MHz (d);
2670-2690 MHz (u); 2500-2520 MHz (d).

1675-1710 MHz (u); 1492-1525 MHz (d);

1610-1626.5 MHz (u); 2483.5-2500 MHz (d);
1614-1627 MHz (bidirectional)
148-150 MHz (u); 137-138 MHz (d);
400-401 MHz ( d)

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

Canada/USA & 1670-1675 MHz (u); 1800-1805 MHz (d)
Me,xico              - 849-851 MHz (u); 894-896 (d);

Note that these sU111ll1ruy allocations may be sl1pje¢f J<:)Jintitations ·and should. be - read iri
conjll.nction withthefull te:\.-t ofWARC 92 i:esoliitiOns·a.ri(iiecommendations

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 coordination for mobile communications in Europe. To ensure that European radio
communications administrations, service providers, operators, industry,
broadcasters, and other users derive maximum benefit from the spectrum, decisions
taken at W ARC '92 must be fully implemented in a co-ordinated way throughout
the European Union.

For systems intended for the general public, immediate priorities should be the
establishment of binding ERC decisions concerning co-ordination of frequencies at
the European level for the frequency bands designated at W ARC '92 for future use
by terrestrial mobile communications and satellite based communications systems.
This should, in particular, include the designation of common bands for DCS-1800
'services, for the future: UMTS as well as frequency bands for satellite-based
personal communications systems.

For systems intended for private use or for the use of closed user groups an
immediate priority shoulld be a decision on the designation of frequency bands, and
the agreement of a time scale for their availability for systems operating according
to TETRA, the European digital trunking standard.

Refarming of spectrum mid uses is a matter which will continue to require careful
and concerted actions. It will be important that co-ordinated positions are taken at
future World Radiocommunications Conferences (WR Cs ) [21 ] with regard to future
frequency allocations.

6. NUMBERING

6.1 The new requirements for numbering

Numbering capacity is a finite and potentially scarce resource. Therefoie, in
developing a future poliiey for mobile and personal communications in Europe, it is
necessary to ensure that the development of the appropriate networks and services
are not constrained by numbering capacity. This challenge can be addressed by
careful management of the overall numbering schemes, both at the international and
the national levels.

In particular the overall management and allocation arrangements must address
three general issues to ensure:

          - that there is sufficient capacity and flexibility within the overall numbering
scheme for all operators and users

          - that where appropriate coherent numbering and dialling plans are introduced by
all operators

21 The next World Radioconununications Conferences (WRCs) will take place in 1995 and 1997.

129

          - that numbering is placed on a level playing field for all operators, ahd in
particular, that there are equitable allocation arrangements. In the specific case
of mobile and personal network and service operators and service providers
their needs with respect to numbering are

           sufficient capacity within national numbering schemes with the appropriate
access branding (identification) and appropriate tariffing

           the ability to extend allocations

       - the freedom to develop services uninhibited by constraints caused by numbering

For mobile and personal communications services, users may also require numbers
which are transferable between operators (i.e. portable numbers) thereby allmving
users to change operators without requiring a change of number.

6.2 The personal telephone number and universal personal telecommunications
(UPT)

At present, users of mobile services are allocated numbers which are country,
network and operator specific. However m the future, with increased globalisation,
and increasing competition between operators and service types, users may wish to
have numbers which are independent of network provider, service type, location and
terminal equipment. In other words, users should have _personal_ numbers which are
allocated to each individual.

Such personal numbers would not be limited in scope to mobile or wireless services
but would be generally applicable across all mobile and wireless services and the
fixed network (i.e. the PSTN/ISDN). This would allow for full personal mobility
with the potential for standardised access arrangements.

6.3 The requirements for numbering coordination and the future role of ECTRA

At present, numbering arrangements are developed nationally within a framework
set up by the International Telecommunications Union (ITU).

Numbering policy within the EC to date has mainly concentrated on ham10nisation
of certain numbering codes, through the creation of :

22

          - a common European emergency number ( 112) ; and

          - a common international access code (00) [23 ]

In future, it is clear that with increasing service innovation and greater levels of
competition, numbering will become a key issue.

22 Council Decision of 29th July 1991 on the introduction of a single European emergency call numbl..!r

(91/396/EEC; OJ L217/31, 6.8.91)

23 Council Decision of 11th May 1992 on the introduction of a standard international telephone access code in thl..!
Community (92/264/EEC; OJ L137/21, 20.5.92).

130

Future arrangements for numbering management must take into account dynamic
market changes in order to allow in particular for growth, the introduction of new
technology and new services, progressive regulatory changes and the gradual
convergence of fixed and mobile services.

This results in the need for a clear European wide policy for the development of
numbering schemes in Europe, and greater independence of the management
function than exists at present in many countries, are thus evident.

Numbers for mobile and personal services are currently allocated from within
national numbering plans. The only example outside this arrangement is the
numbering allocation for Inmarsat where numbering is done by ocean region using
Inmarsat specific numbers. In the future with an expected increase in regional and
global mobile services, numbering for such services must be co-ordinated on a
broader basis than purely national schemes. Numbers could for example be
allocated from within the: proposed European numbering space.

The initial framework for co-operation in this field is set out in Council Resolution
92/C318/02of19 November 1992 on numbering [24 ] (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 general [26], the Commission submitted a "Proposal for a Council Directive
concerning the protection of personal data and privacy in the context of public
digital telecommunications networks, in particular the Integrated Services Digital
Network (ISDN) and public digital mobile networks" [27] . This proposal, which is
complementary to the general directive, aims at implementing further measures for
the protection of personal data and privacy with regard to the specific requirements

25 Resolution on Council Recommendation 86/659/EEC, OJ No C 7, 12 January 1987, p. 334

26 COM (90) 314 final, 13.9.90

27 OJ No C 277, 5.11.90, p. 12

132

of digital telecommunications networks in order to prevent divergent developments
in the Union which could endanger the internal market for both telecommunications
services and terminal equipment (see Annex D for further detail).

8. SAFETY AND ENVIRONMl:NTAL CONSIDERATIONS,

8.1 The issue of electromai~netic compatibility and electromagnetic exposure

All radiocommunications devices involve the transmission and reception of energy.
Transmission power levels can vary between a few thousandths of a Watt for
wireless microphones, up to very high power in the case of radar equipment. High
power levels may produce health risks, and most industrialised countries have some
mies concerning public and/or occupational limits on exposure. Physical means,
such as fences keep people away from danger areas in most cases.

Two main types of effect are attributed to exposure to electromagnetic radiation thermal and athermal effects.

As regards thermal effects, a number of organisations have endeavoured to assess
the health risks of exposure to non ionising radiation. At an international level a
review by the International Non Ionising Radiation Committee of the International
Radiation Protection Association (IRP A/INIRC) led to the publication in 1988 of
guidelines on the limits of exposure to radio frequencies.

At a national level various national standards have been established (such as
National Radiological Protection Board standards in the UK, VDE 0848 in
Germany and the ANSI standards in the USA). There is however a relatively large
range of standard values documented in these standards. and significant differences
in the measurement and implementation parameters. In addition much of the
evidence on which these standards have been based is statistically inconclusive, and
some of the longer term effects are not well researched.

In the case of athermall effects, so far as the possible harmful effects of use of
mobile terminals is concerned, the experimental evidence amassed so far does not
show that the level of radiation could be harmful to health, but on the other hand it
does not prove conclusively that it is not. It is nevertheless at present generally
accepted that the health risks associated with the normal use of mobile terminal
equipment seem to be low. Given substantial public concern, it is, however, urgent
that the Community continues to monitor the situation and support research to
allow for additional evidence to be produced.

A further factor is that the burgeoning growth in mobile communications has led to
an increase in the occurrence of electromagnetic interference. This problem is
already addressed in Directive 89/336 on electromagnetic compatibility2 [8] .
However, the proliferation of electronic devices in road vehicles (such as anti-lock
breaking (ABS) systems ); the use of mobile systems and handsets in close
proximity to vehicle ele:ctronics; cable television; itself a growth industry in the

28 Council Directive Of 3 May 1989 on the approximation of the laws of the Member States relating to
electromagnetic compatibility (89/336/EEC~ OJ 1363/30, 13.12.89 as amended by Cow1cil Directive
92/31/EEC of 28 April 1993~ OJ 1126111, 12.5.93

133

Member States or to hearing-aids and heart pace-makers, demands a careful
exercise to monitor the effectiveness and applicability of existing European
Community measures. Mechanisms to mandate CEN-CENELEC to establish
appropriate Eurppean _standards for enhancing current protection continue to be
justified.

8.2 The issue of access to suitable sites and environmental aspects

All wide-area mobile radio systems require externally mounted antennae at central
base sites. These antennae are used for transmitting and receiving signals to and
from the user terminals.

In order to satisfy radio propagation requirements, antennae are generally mounted
above and clear of local ground obstacles, buildings, people, trees, etc. In addition,
since most mobile radio systems require near line-of sight between the central base
sites and the user terminals, antennae have to be mounted on relatively tall towers
and often on hill top sites. Such requirements can have a visually obtrusive impact.

The distance between antenna sites will again vary depending upon the service, but
in the worst case, for high density areas with small cell sites, antenna sites may be
required to be no more than 2 km to 3 km apart. Where there are two or three
operators in a region this can result antenna masts being only one kilometre apart.

The overall result is that with a variety of mobile services, and with each service
being provided potentially by multiple, competing operators, there is the potential
for the emergence of a very large number of relatively closely spaced, visually
obtrusive antenna sites.

In some instances it has been possible to reduce the visual impact of individual
antennas either by concealing them behind other installations (such as advertising
hoardings) or by disguisiJig them as other more visually acceptable installations).
However it is currently considered impractical and unecofl_omic to do this on a
widespread basis.     

8.3 Sharing of infrastructure

In order to reduce environmental impact, two measures are possible. The first is to
encourage operators to share sites wherever possible. While this may increase the
number of antennas mounted on individual towers, it will reduce the overall number
of towers.

The second measure is to permit competing network operators to .share common
radio infrastructure. This will have a marginal effect on the extent of competition
between operators and reduce the overall number of individual base station
antennae required within a given region.

Consequently, site sharing between operators of telecommunications services, or
between telecommunications and operators of non-telecommunications facilities,
such as terrestrial broadcasting sites, should be allowed. Infrastructure sharing
should be considered under defined circumstances, allowing two or more operators
to share some range of common radio infrastructure. This may include antenna
sites; masts, antennas, transceivers and other network equipment.

134

9. THE FUTURE PERSONAL COMMUNICATIONS ENVIRONMENT: MOBILITY

IN THE FIXED AND WIRELESS NETWORKS

9 .1 Current fragmentation through separate licences

The current reality of a highly fragmented European network and service
environment tends at present to undermine the vision of convenient, seamless
personal communications services covering all user situations.

Fragmentation occurs primarily as a consequence of nationally-based regulatory
approaches and the influence of these on market structure:

          - National licensing has terided to produce varied licensing approaches and
conditions on operators, meaning that many services are still available only on
a national basis and terminal equipment cannot be used freely from one network
to another;

          - Regulation has drawn distinct boundaries between the fixed, mobile and
satellite areas, with separate licensing/authorisation in each area;

          - Within the mobile: area, further regulatory market boundaries have been
introduced through separation of licensing along the lines of different mobile
radio systems, for reasons of frequency management and the ability individually
to control the numbers of entrants using each type of system.

Aside from supply side inefficiencies that such approaches can bring, such as the
loss of economies of scale and scope and distortions to competition, a highly
important effect for many users in order to obtain a full range of
teleconununications products and services, users must deal with a . variety of
different suppliers, and work within the limitations of individual chosen solutions.

9.2 The pan-European dimension

Memoranda of Understanding (MoUs) agreed between national operators, for
example, through the GSM and ERMES systems have been an important factor in
assisting the coherent deployment and operation of pan-European services, in
particular, the ability to 'roam' using a mobile terminal or SIM-card - even if full
implementation of roaming (including, the case of GSM) is still some way off (see
above).

Such arrangements must remain at the centre of a common approach to panEuropean personal communications; however, in order to maximise their impact the
development of further specific approaches for mobile and personal
conununications services will be required.

135

9.3 The new environment set by the Telecommunications Review

The 1992 Teleconununications Review, which formed the basis for the timetable
established in Council Resolution 93/C213/02 of 22 July 1993 [29], now provides the
opportunity to define an appropriate environment for personal conununications.

The goal of full liberalisation of public voice telephony service will present a
number of highly significant opportunities for development of personal
conununications, including the possibilities for operators to transport voice traffic
between fixed (as well as mobile) network destinations, and freedom to combine and
retail services offered on both fixed and mobile networks. This enviromnent is,
inter alia, likely to spur development of shared network intelligence which is
essential for the integration of personal communications across different user and
network environments (see Annex D).

29 Coimcil Resolution of 22nd July 1993 on the review of the situation in the teleconununications sector and the
need for farther development in that market (93/C 213/01, OJ C213, 6.8.93).

136

10. CONCLUSIONS

_Member states have in general interpreted the liberalisation trend set in the 1987 Green_
_Paper._

Most Member States have issued licences to more than one operator (e.g. GSM), on
the intention to promote a more competitive environment.

_Competition has resulted in greater benefits to both the users and the providers_ _of_
_mobile services._

An open, competitive market has stimulated the growth and development of mobile
services promoting a rapid take up of better and cheaper services, in particular, in
relation to GSM.

_Market structure is being regulated along the lines_ _of_ _different mobile technologies._

National Regulatory Authorities in the Union and elsewhere have adopted policies
which structure the market along the lines of different existing mobile radio
systems.

This may limit the ability of the sector to meet market requirements, if it is not
balanced by greater fle:xibility in service provision, and the ability to offer a
combination of services.

_Absolute barriers to entry remain in a number_ _of_ _Member States._

A number of Member States still maintain exclusive and special rights in the sector.
These barriers must be eliminated if the mobile market is to develop fully.

_Licence award systems differ substantially._

Mobile operators are awarded licences on the basis of national procedures and
nationally focused evaluation criteria. Selection procedures are not uniform and in
many cases lack transparency. Member States often retain considerable discretion
due to the fact that neither the invitations to tender nor the evaluation procedures
give a clear indication of the relative weight of the assessment criteria.

_Distortions are caused by differing licence conditions._

There are major distortions to competition and market structure both within and
_between technologies, rnsulting from differences in licensing procedures and the
basic licence terms suc:h as those covering for interconnection and the use of
infrastructure.

Presently, Member States follow significantly different regulatory approaches. The
duration of licence terms and the conditions placed on mobile operators differ from
country to country and from operator to operator. This in many cases is causing or
has the potential to cause significant distortion of competition.

137

_Efficiency_ _of_ _spectrum use will become more_ _and_ _more vital_

The spectrum scarcity in mobile communications calls for the adoption of frequency
efficient technologies. However, reliance on the most efficient technologies does not
dispense the need to accurately plan the use of radiofrequencies inside specific
frequency bands and between ·these and neighbouring _I_ contiguous bands. An
acceptable approach must be ensured in the assignment of frequencies between new
and previous technologies in order to minimise mutual interference and maximise
frequency re utilisation.

_Numbering is_ _of_ _special significance to the provision_ _of_ _mobile services_

Numbering raises significant new issues and requirements. Among these will be the
need for personal numbers to facilitate personal mobility across all networks and
environments.

_Safety and environmental conditions will gain prominence/i.nfrastructure sharing will_
_become_ _an_ _important issue._

Substantial public concern exists ·about possible health hazards resulting from
electromagnetic exposure, and problems of electromagnetic interference with regard
to other sensitive equipment, such as hearing aids, heart pacemakers and Anti-lock
Braking Systems.

Radio towers and other radio installations may also raise environmental concerns'
and issues in town planning. The promotion of infrastructure sharing seems to be a
way forward.

_The agreement on_ _full_ _liberalisation_ _of_ _public voice telephony services in 1998 presents_
_an opportunity to define concepts_ _for_ _full_ _user mobility on radiocommunications and_
_fix,ed networks._

Full liberalisation of public voice will allow the combination of services via mobile
and fixed networks and therefore facilitate full end-to-end service in a personal
communications environment. Based on the convergence of intelligent networks
and digital mobile communications networks, this will promote more efficient and
effective network and service operation and will offer full mobility services to the

user.

138

Towards the Personal Communications Environment:

Green Paper on a common approach in the field of

mobile and personal c:ommunications in the European Union

ALNNEXC

REVIEW C>F WORLD-WIDE

DEVl:LOPMENTS

139

TABLE OF CONTENTS

1 DEVELOPMENTS IN THE UNITED STATES .................................................. 142

1.1 Technology and market trends........................................................................ . . . . . . . 14 2

1.2 Licensing and selection procedures ......................................................................... 143

1. 3 Current approach to personal communications services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

1.4 Role of satellite-based personal communications .................................................... 145

2. DEVELOPMENTS IN JAPAN .................................................................................... 146

2.1 Technology and market trends ............................................................................... 146

2. 2 Licensing and selection procedures............................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 7

2. 3 Current approach to personal communications services . . . . . . . . . .. . .. . .. . . . .. . . .. . .. . . .. .. .. .. .. 14 7

3. DEVELOPMENTS IN THE PACIFIC AREA AND ASIA OTHER THAN

JAPAN .......................................................................................................................... 148

4. DEVELOPMENTS IN THE MEDITERRANEAN AREA, NEAR EAST,
AFRICA, LATIN AMERICA ...................................................................................... 149

4.1 Mediterranean area and Near East ......................................................................... 149

4.2 Africa .................................................................................. · ................................. 149

4.3 Latin America ....................................................................................................... 150

5. CENTRAL AND EASTERN EUROPE ....................................................................... 150

5 .1 The special potential of mobile communications for Central and Eastern
Europe ................................................................................................................. 150

5. 2 Market and technology developments ............................... : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 I

5. 3 Co-operation mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3

6. THE WORLD-WIDE POSITION OF EUROPE IN DIGITAL MOBILE

TECHNOLOGIES ....................................................................................................... 154

6 .1 Adoption of GSM by operators ........................................................................    - .· ... 154

140

6.2 GSM has the potential for becoming a world staiidard for digital mobile
communications .................................................................................................... 155

6.3 The world market potential of other European digital mobile technologies:
DECT, TFTS and others ...............................................•...., .. °' ............................... 157

6 .4 The position of the European mobile equipment manufacturing industry ................ 15 7

7. GLOBAL SATELLITE-BASED PERSONAL COMMUNICATIONS

SYSTEMS ...................................................................................................................... **158**

_(-----_

7 .1 Current projects .......................................................................................... :......... 15 8

7.2. Major issues involved ................................ _ ...... ~ ..................................................... 159

7.3. The issue of US dominance in the sector ................................................................ 159

8. CO-ORDINATION IN THE INTERNATIONAL
TELECOMMUNICATIONS UNION (ITU) .............•................•...... -.......................... 160

8 .1 Recent reform of radio communicatiQns co-ordination in the ITU ........................... 160

8.2 World Radiocommunications Conferences (WRCs) and European
representation .......................................         - ~ ................................. : ...... ." ..................... 161

9. ACCESS TO THIRD MARKETS .............................•................................................. 161

9 .1 Position of third country manufacturers in the European market ............................ 161

9.2 Position ofthird country operators ip. European mobile communications ................ 162

9 .3 Issues of access to third country markets; ownership restrictions in the
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

9. 4 The multilateral framework: the impact of the GA TT Agreement ........................... 163

10. CONCLUSIONS .......................................................................................................... 165

141

1 DEVELOPMENTS IN THE UNITED STATES

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 technology [1], 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.

2

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.

See "Global Competitiveness of US Advanced-Technology Industries: Cellular Conununications", US

International Trade Conunission 1993.

142

4

~·

T}l.e FCC has announced the frequency allocation for US Personal Communications
Services. In Septemb<~r 1993 the FCC allocated a total of 160 MHz for PCS
services with 120 MHz for public (i.e. licensed) services and the remainder for low
power PCS devices which do not require licences.·

Commercial mobile data. services have been available in the United States for more
than seven years and now cover about 97% of US metropolitan areas. Such
services primarily meet the needs of corporate users and closed user groups.

The US continues to play an important role in the supply of mobile systems,
equipment and handsets throughout the world, with AT&T, Northern Telecom and
Motorola winning 37% of the non-US market for analogue systems in 1991 and
40% of the non-US market for digital systems. Motorola continues to be the largest
supplier of handsets with a 23 % share of the 1990 world market [3]      

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 competition [4 ] .

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 A [5] ) services. Hence, mobile calls requiring transmission to a different
LAT A must be handed over to a long distance operator. This restriction creates
difficulties for the RBOCs' mobile service provision as mobile licence coverage is
different to the LATA i:;overage in more than 1,300 locations. This imposes an

Global Competitiveness of US Advanced-Technology Industries: Cellular Communications, US International

Trade Commission 1993.

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

Local Access Transport Area.

143

6

7

9

additional hand-on cost on the RBOCs which is not imposed on competitive mobile
operators [6]      

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 licences [7] . 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 technology [8 ] to be introduced by a
specified date comparable to that found in the European Union for the introduction
of GSM technology.

There are no direct foreign mobile service providers in the US. At the time of the
award of the original analogue licences there were few non-US players able to
compete for such licences. Additionally, Section 310 of the 1934 Federal
Communications Act limits foreign ownership of a cellular licence to a maximum of
25%. BT has divested itself of its 22% holding in McCaw through a sale to
AT&T. This was previously the largest foreign holding in a US mobile operator.

1.3 Current approach to personal communications services

Reflecting the approach taken with analogue cellular, the FCC has allocated
spectrum for PCS based on a division of the United States into 51 Major Trading
Areas (MTAs) and 492 Basic Trading Areas (BTAs) [9] . Instead of automatically
allocating spectrum to incumbents or using a lottery system, spectrum will be
auctioned during 1994. Existing cellular operators can bid for licences _outside_
their existing areas, or where existing cellular services serve no more than 10% of
the population of the PCS service area. They can also bid for up to 10 MHz of
spectrum _inside_ their existing service areas. PCS licensees will be allowed to

Applications can be made by the RBOCs for waivers in individual cases of the prohibition on inter-LATA
carriage. However, such applications are cumbersome and take an average of 19 months to process. See
Global Competitiveness of US Advanced-Technology Industries: Cellular Communications, US International

Trade Commission 1993.

Global Competitiveness of US Advanced-Technology Industries: Cellular Communications, US International

Trade Conunission 1993 ..

This can be contrasted for the mandatory use of the AMPS analogue technology required by the FCC, when
first licensing mobile systems.

Each Major Trading Area will have two licence allocations of 30 MHz. Each Basic Trading Area will have
one 20 MHz and four 10 MHz licence allocations. There will be over 2,500 licence allocations in total. MTAs

and BTAs, originally defined by Rand McNally, are _not_ identical to Metropolitan and Rural Statistical Areas
as defined for the analogue cellular service, however, MfAs generally cover urban areas and BTAs rural ones.

144

aggregate their allocat(~ spectrum, but not to hold more than 40 MHz of spectrum
in any particular area.

PCS licensees are free to choose the standards that they will operate to. As with the
existing cellular operators, the industry is divided between supporters of TD MA
techniques and those supporting CDMA. It is likely that examples of both
technologies will emerge, including DCS 1800 derived from the GSM standard.

1.4 Role of satellite-based personal communications

                        - _f_

The development of satellite personal communications in the US must be seen in the
general context of mobile satellite services and the absence of a US-wide terrestrial
network. When compared to Europe or Japan there are many more areas of the US
where the number of subscribers is insufficient to justify the deployment of a
terrestrial system and where a satellite mobile system is the only suitable mobile
technology.

The main developments in the US have been the award of a monopoly license in the
mid-eighties for a geostationary system, and, recently, the various initiatives with
regard to low-earth orbit satellites (LEOs). In the mid-eighties, the FCC concluded
that the US market was not big enough to support more than one licensee for
. geostationary mobile satellite services. It ruled that all applicants should form a
cqnsortium (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 datamessaging service in 1992, ~d will launch its first satellite in 1994.

Renewed• attention on the satellite-based personal communications market was
generated by new proposals for non-geostationary orbits. Applications are expected
to be for both voice ("big LEOs") and non-voice ("little LEOs") systems. These are
being promoted by US manufacturing industry, which is looking for new markets,
now that demand for military applications is decreasing. The US government has
negotiated through 1he 1992 World Administrative Radiocommunications
Conferences, notably W ARC 92, (see Annex B for further detail) world-wide
frequencies for these mobile satellite services. After securing such agreement, a
process of negotiated rule-making started, under the auspices of the FCC, that
eventually will result in the awarding of one or more licensees to exploit these
services.

There are more than 5. applicants for "big LEOs", and 3 for "little LEOs".
Proposals for the provision of global services include projects like Motorola's
Iridium, Loral's Global star and Odyssey. It remains uncertain, however, how
many systems the market and available spectrum can support.

The US policy of retaining a domestic monopoly for satellite-based mobile services
appears to rest on a presumed scarcity of frequencies and a modest market
potential. It would se:em to be at odds with the recently started procedures for
licensing arrangements for satellite PCSs on the domestic market. The US

IO AMSC: American Mobile Satellite Corporation. The major stockholders are Hughes Communications, Inc.,
McCaw Celiular Communications, Inc:., and Mobile Telecommunications Teclmologies Corp. Together they
own approximately 90% of the shares.

145

approach seems to seek effective control of global mobile satellite ventures, while
closing the vital domestic market to foreign competitors.

2. DEVELOPMENTS IN JAPAN

2.1 Technology and market trends

Japan was the first country to license an analogue cellular service. Nippon
Telegraph and Telephone Corporation (NTT) the monopoly domestic carrier began
its service in 1979. Subscriber growth was modest during the early and mid-1980s,
but accelerated following regulatory changes embodied in the Japanese
Telecommunications Business Law of 1985. This permitted market entry by new
common carriers . in fixed-wire, mobile cellular and paging operations. A large
number of new, though often commercially linked, carriers entered the market.

NTT remains the largest mobile communications services supplier. There were l . 7
million cellular mobile telephony subscribers at mid-1993 and some 40% of this
market is held by new carriers. A similar pattern can be seen in the paging market.
In September 1992 there were 6.3 million paging subscribers in Japan. In all 47
prefectures there were at least two competing paging operators with 36% of the
market held by new carriers.

Three mobile communications groups dominate the Japanese market: NTT, IDO
and DOI. They use two analogue cellular standards (N-MATS and JT ACS) which
operate in the 800 and 900 MHz frequency bands.

NTT's mobile communications subsidiary, NTT DoCoMo, is licensed
in 9 specific regions in Japan giving it the commercial advantage of de·
facto nationwide coverage. It operates an N-MATS system, provided
by Motorola, which has extended the capacity ofNTT's earlier system.

Eight regional mobile operators owned by DOI (Daini Denden Inc.)
compete with NTT in regions other than Tokyo and Chubu using
JT ACS systems.

Regional mobile operators owned by IDO {Nippon Idou Tsushin
Corporation) compete in the Tokyo and Chubu areas with both NMATS 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 sector [11] .

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 .

II

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 coexist with the existing analogue system. It remains under development in tern1s of
capacity and services: a half-rate codec algorithm is in preparation and integration
with national plans for personal numbering is being considered.

The Japanese approach to personal communications is based on the Personal Handy
Phone (PHP) system standard. These systems should be considerably cheaper than
PDC-based cellular services, and have more in common with a two-way telepoint
concept. They will use low power base stations and handsets and will not provide
uninterrupted handover. Licenses will be awarded in the 1. 9 GHz band. The
service will offer a genuine, wireless alternative to the current local loop and is of
considerable interest to NTT's regional domestic fixed-wire competitors.

See, for example, "Communications in Japan 1993" - White Paper by the Japanese Ministry of Posts and

T eleconununications.

147

3. DEVELOPMENTS IN THE PACIFIC AREA AND ASIA OTHER THAN JAPAN

Like Europe and the US, the Asia/Pacific region is undergoing a mobile service
boom, brought about by general economic performance and by the emergence of the
mobile telephone as a symbol of personal economic success. At the start of 1993
there were some 2.4 million cellular subscribers in the region - a 67% increase on
1992. Demand for cellular telephony is driven by relatively wealthy users based in
urban centres. In countries with undeveloped fixed networks cellular telephony
provides an efficient overlay network linking concentrated trading communities and
offers reliable international access.

Increases in cellular communications use have been paralleled by growth in paging
systems. Paging is an enormous success in the Asia-Pacific region. There is a
broad acceptance of the technology in Asian-Pacific markets where paging is used
widely by consumers as well as for business purposes. Operators and
manufacturers have responded by marketing an extremely broad range of pager
styles and functionality's. Value added services and suppliers have proliferated,
further fuelling market growth.

Telepoint has been a success in Hong Kong and Singapore where high population
densities allow virtually 100% coverage at relatively low cost. Low prices and
cultural factors have played an important rote. High pager penetration encourages
acceptance of telepoint technology offering outgoing calls only. A public
transport/pedestrian orientation means adoption is not constrained by the lack of a

"hand-off' capability.

Countries in the Asia/Pacific region have historically imported technologies from
abroad to fulfil their mobile communications needs. For the next generation of
systems many Asia-Pacific countries have adopted, or are now considering
adopting, digital cellular technology. As the region is presently less economically
cohesive than North America or Europe there is no "top-down" push for the
creation of a uniform standard for the region.

Operators are presented with three competing digital cellular teclmologies: Europe's
GSM, North America's USDC and PDC from Japan. While, in certain countries a
single standard has been selected, some governments have preferred a dual
approach, adopting GSM in the 900 MHz band and USDC in the 800 MHz band.
At present GSM is the most popular choice for new systems.

The region demonstrates a wide range of regulatory structures from vigorous
competition in Hong Kong to continued monopoly provision in Taiwan. Markets
too, are heterogeneous in character, ranging from the highly developed economies
Australia and Hong Kong to the newly emerging markets of China and Vietnam.

Australia is presently the largest cellular market in the region with over half a
million subscribers. Market growth has been driven by the willingness of the highly
urbanised, car-oriented population to embrace mobile communications technology.
There are three licensed operators: Telecom Australia, Optus and Vodafone Pty.
All will adopt GSM technology and this "tripoly" will continue until 1997. At that
time the Government has suggested that it will fully open up the mobile market.

The Korean Government has committed itself to the US CDMA standard in
partnership with Qualcomm of the United States. The present monopoly mobile

148

_/_ operator Korea Mobile Telephone will implement a CDMA system in 1994. The
planned second operator should be licensed in mid-1994.

Taiwan is the second largest regional market and, along with that of Singapore, has
a single monopoly operator. The national cellular network was launched by the
Directorate General of Telecommunications (DGT) in 1989 using the AMPS
standard. At the start of 1993 the existing network was within 3 % of its ultimate
sub.scriber capacity and the need to move towards a digital network is recognised.
The Government has decided to implement both USDC and GSM systems. USDC
to provide an upgrade path for the present AMPS network while a GSM system
will facilitate roaming with mainland China.

China can be identified as the key regional market in the longer term because of its
size and rapid economic growth. At the start of 1993 there were 160,000 mobile
subscribers to the networks operated by Chinese local telephone companies on
behalf of the Ministry of Posts and Telecommunications (MPT). MPT is carrying
out trials of GSM11. Leading equipment suppliers have set up joint ventures ·in
China.

4. DEVELOPMENTS IN THE MEDITERRANEAN AREA, NEAR EAST, AF'RICA,
LATIN AMERICA

4.1 Mediterranean area and Near East

In late 1991 telecommunications organisations from the countries of the Gulf Cooperation 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 joint ventures do not necessarily include the local
telecommunications operator and are more likely to be subject to competition.

Systems using the Scandinavian analogue NMT 450 standard were the preferred
technology for mobile networks entering service during the early-l 990s. These
frequencies are relatively free of other users in the region. However, most countries
have declared their intention to licence digital cellular systems in the near future. In

151

particular, spectrum constraints in the 450 MHz band mean that available capacity
may be fully utilised in these networks during 1994. These implementations will
use GSM technology. Again Hungary has led the way by offering GSM licences to
two consortia: Westel 900 led by US West; and Pannon GSM involving TOs from
the Netherlands, Denmark, Sweden and Finland.

By adopting GSM and the .other mobile standa;ds being implemented in the rest of
Europe, these countries have the potential to participate in the spread of seamless
and cost effective pan-European mobile services. This will increase the level of
economic cohesion between the European Union and central and eastern Europe and
will offer additional revenue generating possibilities in these countries through

"roaming" of high volume foreign users.

While decisions favouring the licensing of GSM systems have been made in
principle this is subject to a number of constraints in practice. The focus of most
operators is on rolling-out existing networks and not on the implementation of new,
digital technologies. While this could be compensated for by the allocation of
additional licences, this may conflict with existing licence conditions. For Russia
and other CIS countries, restrictions on the export of sensitive technologies continue
to be a major barrier to GSM implementation. While licences may have been
allocated the actual date of GSM introduction remains unclear in these cases.

Development of widespread personal communications use in central and eastern
Europe depends primarily on overall economic growth. Until a general economic
upturn in these countries, the market will remain dominated by a small number of
"hard-currency" users able to pay the premium tariffs which are high even by
Western European standards. The introduction of greater levels of competition - in
fixed or mobile services - will provide incentives for the operators to extend their
customer base to customers with a lower revenue-earning potential.

For cellular operators (other than those using NMT 450 technology) there remain
difficulties with military and emergency service use of the necessary frequencies.
Unless spectrum allocation problems are addressed these countries will not be able

- to benefit from European and world-wide co-ordination initiatives. It is possible
that licence fees will be used to fund the necessary frequency reallocation.

Opportunities also exist for radio-based local loop implementations to overcome
poor levels of fixed infrastructure deployment. Deutsche Telecom has implemented
temporary systems based on NMT 900 technology in advance of fixed network rollout 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 impact and interrelationship.     

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.

~ .....

|Col1|Countries allocating one lice1fre|Countries aJlocati11gtw6>licerices|Countries allocating rriore than two licerices|
|---|---|---|---|
|EU|Luxembourg|Belgium,Denmark,Frnnce,Germnny,<br>G rccn·,I rclnnd,ltnly,Nethcrlnnds,<br>Portugal,Spain,UnitedKingdom.||
|Other<br>Europe|Andorrn,Austrin,Crontin,CzechRepublic,<br><br>Estonia, Iceland,Latvia,Romania,<br>Slovakia,Slovenia,Switzerland,Ukraine.|I Finland,1 lungnry,Norw;1y.|Sweden,Russ-in.|
|Other<br>countries|Bahrain, Brunei Darussalam, Cameroon,<br>Cyprus, Egypt, Fiji,Iran,Israel, Kuwait,<br>Lebanon, Morocco, Nigeria, Oman,<br>Pakistan,Qatar,SaudiArabia,Singapore,<br>Sri Lanka, Syria, Taiwan, UnitedArab<br>Emirates, Viet Nam.<br>•r•.•.•••"M"-"""""-'''"·""•m•.-,~••~1<br>~~35 licences and countries~~|China, Indonesia, Malaysia, New Zealand,<br>Philippines, South Africa, Thailand,<br>Turkey.<br> ..~,,.~_.,,._...~~-•M~--~<br>..~~..,.~~<br>44licencesin22count~~ries~~|Australia, Hong Kong, India.<br>|
||||~~29 licences in 5 countries~~|

Source: CEC studies, regulator/operator infonnation

6.3 The world market potential of other European digital mobile
technologies: DECT, TFfS and others

A 'major lesson from the international acceptance of GSM is that there is
considerable world-wide potential for suitable standards which have been adopted
throughout Europ". Other European digital mobile technologies can achieve similar
acceptance if these conditions are met.

In principle suitability depends on the extent to which technologies specified for the
European market find equivalent conditions outside Europe, or the ease with which
they can subsequently be adapted to the conditions which apply in other markets.

Furthermore, unequivocal acceptance of technologies in Europe is vital so that
manufacturers can be sure _of_ a large European market. Technology which
achieves this acceptance increases the likelihood that they it be chosen by operators
outside Europe. There will be a broad base of competing manufacturers and, as a
consequence, infrastructure and terminal costs will be reduced in comparison to
other technology choices.

DCS-1800 based on GSM should be able to build on the world-wide success of
GSM. A major· precondition for exploiting this 'potential will be wide-spread
implementation of DCS-1800 based systems in Europe, as required evidence of its
commercial and technical viability.

The Digital European Cordless Telephone standard (DECT) has been specified by
ETSI to ·be suitable in a wide variety of situations and to offer a broad range of '
functions. This flexibility ·will encourage international use. Three types of
applications are foreseen:

    - business communications, including the provision of cordless private
branch exchanges and cordless local area networks;

      - small. business and residential use where one or more handsets would
use a common base station located on or near the premises; and

      - public access - a telepoint type system in a neighbourhood or other
public location.

The European TFTS (the Terrestrial Flight Telecommunications System) is the first
digital terrestrial based telephone system for aeroplane passengers which will
provide a cost effective alternative to satellite systems in the Europe continent. As
it is based on a terrestrial network it should provide lower tariffs once deployed.
The quality of the service· will also be higher and will avoid current satellite-based
time lags.

6.4 The position of the European mobile equipment manufacturing industry

The rapidly expanding World market for mobile communications can be expected
to lead to. changes in the competitive position of players in the telecommunications
equipment . industry. Suppliers with strengths in digital mobile switching, base
station, and mobile terminal supply will gain compared to suppliers focused on
"traditional" non-mobile telecommunications equipment.

157

With the establishment of GSM as a European and World standard there will be
significant, new opportunities for European equipment manufacturers which chose
to invest heavily in the development of GSM products in the late 1980s. With a
buoyant home market in Europe and strong GSM growth in the Asia/Pacific region
these manufacturers are well placed to benefit from World mobile communications
growth.

The GSM system's non-proprietary nature is a key element in its acceptance. by
operators. The consequence for equipment vendors is that competition in GSM
equipment supply wi.11 be keener than with other cellular technologies. Some
manufacturers will enjoy success, while those unable to innovate and to control
production costs may fail to benefit.

There are three identifiable segments in . the equipment supply industry and
successful vendors must be clear as to their strategies in addressing each, or a
combination, of these. On the network side a combination of mobile switching
technology and radio base station technology must be offered to win orders from
operators. This can be provided from within the same vendor's organisation or
through the formation of appropriate strategic or tactical alliances.

On the other hand, mobile terminals can be expected to move from being viewed as
telecommunications equipment to mass-market consumer electronic products,
whose consumer appeal and design will become increasingly important. They will
often be integrated with other consumer goods, such as personal digital organisers.
European companies wishing to compete successfully in this market must reach
levels of efficiency in production achieved by Asian manufacturers of high-volume
consumer goods. The associated dynamics of manufacturing design and marketing
of products with short life-cycles must also be mastered.

7. GLOBAL SATELLITE-BASED PERSONAL COMMUNICATIONS SYSTEMS

7.1 Current projects

Most satellite PCS proposals (including those for Low-Earth-Orbit satellite systems
(LEOs)) that have now been publicly put forward are largely but not exclusively
American [16] . Non-US led projects include those in the former Soviet Union and
European projects, such as the European Space Agency's project, EMS and
Archimedes. In addition lnmarsat is now developing a satellite personal
communications service, Inmarsat-P, possibly combining Geostationary (GEO) and
Medium Earth (MEO) Orbits.

16 In August 1993, the investors in Iridium Inc. included Motorola, Lockheed, Raytheon and Sprint Corp. from
the US, Nippon Iridium from Japan (a DDI led consortium), Mawarid from Saudi Arabia, Krunichev from the
fon11er Soviet Union, STET from Italy, Muidiri from Venezuela, United Communications Industry Corp. from
Thailand and China Great Wall Industry Corp. from China.

In Globalstar, Loral is co-operating with the European space alliance: Alcatel (France), Aerospatiale (France),
Alenia (Italy) and DASA (Gennany). In Odyssee, Matra Marconi Space from France is working together with

TRW.

158

7.2. . Major issues involved

Any policy with regard to satellite-based personal communications systems must
take into account the interests of users (these systems may offer a valuable addition
to terrestrial based services), the inierests of the manufacturing industry, and of
service providers (satellite and other). In this context the Commission [17 ] has raised a
number of issues in the satellite PCN area, relating to:

        - regulation

       - competition policy

       - standardisation and intellectual property rights

       - economic and industrial considerations

       - multilateral framework and geo-political relations; and

       - third generation mobile communications policy .

Policy in this area cannot limit itself to regulatory questions within the European
Union, but must also address the wider trade issues and issues related to the
competitiveness of European industry.

7.3. · The issue of US dominance in the sector

Discussion of LEOs in Europe accelerated after W ARC 92, in which the United
States supported a major effort to allocate frequencies for thes~ systems.
Immediately after W ARC the Commission initiated a discussion with Member
States on the outcome of WARC 92 with regard to LEOs. The Commission
subsequently met US officials in the United States and organised a hearing on
LEOs in November 1992.

This initial exploratory action resulted in Spring 1993 in the publication by the
Commission of its Communication on Satellite Personal Communications Systems,
together with a proposal for a Council Resolution. In the Communication the ·
Commission emphasised the importance of a pan-European strategy with regard to
satellite PCSs. The Resolution was adopted by Council on 7 December 1993 [18 ] and
represents the starting point for a consistent policy in this area, both within the
European Union and at an international level.

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

18 93/C339/0l; OJ C339/1, 16.12.93

159

8. CO-ORDINATION IN THE INTERNATIONAL TELECOMMUNICATIONS
UNION (ITU)

8.1 Recent reform of radio communications co-ordination in the ITU

National spectrum management tak@s place within a complex framework of
international conventions, treaties and regulations which are the responsibility of the
ITU. The basic instrument of the ITU is the International Telecommunication
Convention which has international treaty status. Regulations and plans for
spectrum allocation and usage, known as ITU Radio Regulations, are agreed
through regular World Administrative Radio Conferences (WAR Cs). Ratification
by individual countries is voluntary, acknowledged in the ITU Constitution by the
recognition of _"the_ _sovereign_ _right_ _of_ _each_ _State_ _to_ _regulate_ _its_
_telecommunications_ _..._ "

ITU activities fall into three main areas:

radio spectrum management

provision of a forum for consultation between administrations,
telecommunications organisations, including the definition of worldwide 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
other GSM markets. In particular North American infrastructure suppliers and
North American and Japanese terminal equipment manufacturers have established a
presence in these markets.

20 See A1mex B

161

Motorola is the fourth largest supplier of GSM infrastructure. It has sold base
station equipment to operators in Germany, Norway, Portugal, Sweden and the UK.
Northern Telecom has combined its expertise in switching with the base station and
radio expertise of Matra Communications to form Nortel Matra Cellular which has
made sales in Austria.

Motorola is the leading world-wide manufacturer of cellular handsets with 23% of
the total world market. In the European GSM market it enjoys a similar position
(and has assumed the role of price leader). Other non-European manufacturers
with a significant share of the cellular handset market are NEC, Panasonic and
Mitsubishi.

9.2 Position of third country operators in European mobile communications

At present there are a number of third country operators (mostly from the United
States) which are active as mobile operators in the European market. These
participate principally through the formation of joint ventures. A number of
different strategies are being used and these depend on the specific national market
addressed and the approach of the entrant company.

Some operators have entered the market by concentrating on setting up _10111t
ventures in the countries of central and eastern Europe, where levels of
infrastructure deployment and service quality have been low. US West has
employed this approach successfully in Hungary, the Czech and Slovak Republics
and Russia.

Others have chosen to participate in consortia bidding for second national GS!'vt
licence or other new licences issued by European Union Member States or EFT A
countries. Successful licence consortium members include: Hutchison Whampoa
which owns 65% of Hutchison Telecommunications, a UK DCS-1800/PCN licence
holder; US West which owns 50% of Mercury Personal Conununications, the other

UK DCS-1800 operator; Pacific Telesis which ovms 26% of Mannesman
Mobilfunk in Germany and 23% of Telecel in Portugal; and Nynex which owns
20% of the Hellas GSM operator in Greece.

A final strategy which has emerged is the share participation in the mobile operator
owned by the national telecommunications organisation: Pacific T cl es is has
acquired 25% of the Belgian mobile operator through this approach.

9.3 Issues of access to third country markets; ownership restrictions in the United
States

While there is a significant non-European presence in the European mobile sector.
as described above, European participation in a number of third country markets
remains restricted. This is particularly the case in the United States which is to
embark on a series of spectrum allocations (through auctions during l 994) for
personal conununications services in which European involvement \Yill be limited
by US regulations.

Section 310 of the Conmmnications Act significantly inhibits the operation of
mobile and satellite services and the provision of telecommunications and broadcast
services by imposing limits on foreign ownership. As a result the FCC docs not
grant licences to operators O\\'ned by foreign governments or their "representatiws"
(a category into which most European Telecommunications Organisations fall) nor

162

to suppliers of broadcast, common carrier or aeronautical services in cases where
the foreign ownership exceeds 20% (or 25% indirectly).

In addition foreign firms may face obstacles to the provision of common carrier
services as a result of FCC authorisation procedure under Section 214 of the
Communications Act of 1934. This requires the FCC to attach such conditions to
the authorisation as it thinks are in the public interest, without there being any
definition of this concept. The FCC has used the concept to delay - or impose
conditions on - authorisations for foreign firms.

Obstacles are also created to international services through the FCC's "Dominant
Carrier" rule. This rule - although recently amended so that carriers with a foreign
ownership of 15% or more are no longer automatically classified as "dominant'' classifies carriers affiliated with a monopoly foreign· carrier in the destination
market being presumed dominant for the route involved. This subjects them to
additional regulatory requirements only placed AT&T in the US.

From the history of treatment of common carrier telecommunications service
providers these will only avoid discrimination if radio communications is not
involved.

Furthermore, uncertainties about the extent to which federal regulation of major US
conm1on carriers may be reduced ("streamlined") and about possible involvement of
sub-federal authorities in regulating "enhanced" (value-added) services, have led to
concerns that foreign value added service providers may face new barriers to
market entry or be insufficiently protected from predatory behaviour from US
network operators. As the linking of mobile service provision with value added
services (such as voice mail and electronic messaging) is vital to the personal
communications strategy of any operator this is a serious concern.

9.4 The multilateral framework: the impact of the GATT Agreement

Many aspects of the European market for telecommunications are being influenced,
directly or indirectly, by the issues discussed in the context of the GATT Uruguay
Round. European Community positions within the Uruguay Round were expressed
in confonnity with Community's competence over trade set out in Article 113 of the
EC Treaty.

For personal and mobile teleconmmnications services (as with other aspects of trade
in goods and services) the Commupity's position in the negotiations covering basic
teleconununications services, following on from the successful conclusion of the

Uruguay Round, will remain closely linked to developments in the European
Union's internal regulatory framework and the need for consistency between its
internal and external positions .

. Within the overall scope of the GA TT, it is the negotiations on trade in servicGs

which are of most relevance to questions relating to this market. These ha vc
focused on the elaboration of a framework of principles applicable to trade in all
services. This framework has been modified or complemented by sectorial
annotations or annexes in order to take into account the specific aspects of different

sectors.

For telecommunications the annex covers, in particular, appropriate conditions for
access to and use of the network. The principles established in Directive

163

21

90/387/EEC on Open Network Provision (ONP) and Directive 90/388/EEC on
competition on Telecommunications Services form the basis for the Community's
position.

The European Community has bound a range of telecommunications services in its
negotiating schedule and preparations are also underway for further negotiations on
the liberalisation of "basic" telecommunications services, extending beyond the end
of the Uruguay Round. After a period of public consult,ation following the
publication of the Mobile Green Paper, those approaches which receive appropriate
support will be incorporated into Union's regulatory framework. This will help to
shape the Community's negotiating position.

Trade in mobile and personal communications services and equipment with third
countries should be handled on the basis of common procedures by .all Member
States, based on the principles of the GA TT framework. Other issues with a direct
impact on trade and Union exports should also be subject to co-ordinated positions.
notably as regards issues of the export of sensitive 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.

In this context exportation of GSM encryption technology is a major issue.

164

10. CONCLUSIONS

_The provision_ _of_ _cellular mobile radio telecommunications services is expanding rapid(l'_
_1-Vorld-wide_ _._ .

This expansion is· driven principally by the demands of business users for premium,
mobile communications. However, the target base of subscribers is now widening
in ii1dustrialised markets as service providers encourage the growth of personal
mobile communications. Personal mobile communications will become a
significant competitive mass market throughout the world before the end of the
century.

_111e_ _United States remains_ _the_ _largest single market_ _for_ _cellular mobile services._

Although the US transition to digital technology has been delayed by contention
over which of two competing technologies to adopt, the FCC is acting to establish a
flexible, market-led environment for the development of personal communications
services. Competition between existing and new licence holders in services.
availability and technology could lead to rapid roll-out of innovative new mobile
services in the US. US interest in satellite-based systems is also intense and, with
one exception, the consortia offering low-earth orbit (LEO) systems are US-led.

_GSM_ _is emerging as_ _the_ _World reference technology_ _for_ _digital mobile systems._

GSM teclmology is how being adopted in Europe, Asia, the Middle East, in Central
and Eastern Europe and in the CIS, having been the first system to reach the
market. The effects of scale economies and additional international roaming
possibilities which GSM offers will cement its position as the World reference
technology. US backing threatens to lead to the adoption of US teclmology in Latin
America where the American analogue standard is widely implemented. High costs
are· hindering adoption of the Japanese digital standard outside Japan.

_With the establishment_ _of_ _GSM_ _as a European_ _and_ _World standard there will he_
_significant,_ _new_ _opportunities_ _for_ _European equipment manufacturers._

Given a buoyant home market in Europe and strong GSM growth in the
Asia/Pacific region, European manufacturers who chose to invest heavily in the
dcvelopmerit of GSM products in the late 1980s are well placed to benefit from
World mobile conlffiuni~ations growth. Of the six major GSM infrastructure

supplie~s five are European (Ericsson, Alcatel, Siemens, Philips and Nokia) and
only one (Motorola) comes from outside Europe.

_111e_ _eventual success_ _of_ _GSM_ _on a World-wide basis will depend on long_ _run_ _relative_
_prices.for infrastructure_ _and_ _terminals._

                         - · Although interi1ational economic, geographic and social inter-relationships remain
imp.ortant ih the choice of a particular standard; relative availability, tcclmical
qualities. and, especially, the cost of GSM in comparison to other digital systems
will detennine its final potential. ETSI's harmonised teclmical specifications should
result in greater freedom for multi-vendor equipment procurement and economies of
scale, so driving irrfrastru.cture prices down. The influence of Japanese and Asian
tenni11al equipment manufacturers will place further downward pressure on handset
prices. and will represent a major challenge for European equipment manufacturers. . . ' ' .

165

_For Central and Eastern Europe and the_ _CJS,_ _GSM_ _will become the digital mobile_
_technology_ _of_ _choice_

Provided that the necessary frequencies in the 900 MHz spectrum can be cleared
rapidly, GSM will be adopted widely in these countries as the preferred mobile
standard.

_For the European Union there will be a need to strengthen co-ordination_ _of_ _policy in_
_the International Telecommunications Union_

In particular work on Third Generation mobile systems \vill need major· policy
attention. W ARC 92 has opened major world-wide frequency bands but has split
off the American market from the rest of the World. For the European· Union
Community it will be important that co-ordinated positions are taken with regard to
future frequency allocations so that Europe's service and equipment industries can
benefit.

166

Towards the Personal Communications Environment:

Green Paper on a common approach in the field of

mobile and personal communications in the European Union

ANNEXD

EXTENSION OF THE

PRINCIPLES OF EUROPEAN

UNION

TELECOMMUNICATIONS

POLICY TO THE MOBILE

SECTOR

167

TABLE OF CONTENTSP

INTRODUCTION .................................................................................................................. 172

GENERAL PRINCIPLES ............................................................................................... 173

1.1 The provisions of the EC Treaty ............................................................................ I 7 3

1.2 Application of the provisions of the Treaty to the teleconmmnications sector....... . _IT:._

2 EXCLUSIVE AND SPECIAL RIGHTS ......................................................................... I 7 4

2 .1 The treatment of special and exclusive rights in the teleconmmnications sector ....... I 7 4

2.2 The application of the Treaty to exclusive and special rights in mobile
conmmnications .................................................................................................... I 7 .:"

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

b) The competition rules ............................................... . ................ I _7h_

c) Possible derogations from the Treaty rules ............................... .. I _7h_

3 LICENSING CONDITIONS APPLICABLE TO THE OPERATION OF MOBILE

COMMUNICATIONS SYSTEMS ................................................................................. I 78

3. l Basic Union principles .............................................................................. . .178

a) General principles ........................................................... . l7S

b) Justifiable restrictions in national licenses ........ .

3 .2 Essential requirements ........................................................... . I SO

3.3 Public service requirements in the fonn of trade regulations ...... . .. 181

3.4 Duration ................................................................................................... . IX I

3 .5 Other conditions imposed on Mobile Operators .................................... . . .. _181_

a) Protection of reserved services ..................... ..

b) License fees ...................................................... .

c) Changes of ownership ..................................... .

3 .6 Promotion of competitive service provision : obligations on Mobile Operators ....... I 83

3.7 Conditions applying to Service Providers and the provision of mobile
communications services........................................................... IX.'

a) Service provision not to be subject to licensing ........... . .. I S-t

168

b) Ensuring compliance with essential requirements and public service
requirements in the form of trade regulations ........................................... I 84

4. FREQUENCIES ...................................................................... ; ...................................... 185

4. l Application of Union policy to radiofrequencies ..................................................... l 85

4. 2 Community initiatives in the field of frequencies .................................................... 18 5

4. 3 Conununity approach to frequency planning and coordination at a European .
level. ............... : ..................................................................................................... 186

4. 4 Priorities in the field of frequency co-ordination............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 8 7

4. 5 Conununity approach to frequency planning and coordination at an
international level........................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 8 8

5. DATA PROTECTION AND PROTECTION OF PRIVACY .......................................... 188

6 INTERCONNECTION AND INTERFACES ................................................................. 190

6.1 The basic principles for interconnection in the Union ............................................. 191

a) Interoperability ....................................................................................... 192

b) Interconnection ....................................................................................... 192

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

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

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

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

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

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

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

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

b) Access to the IN functions of mobile networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I _9_ 7

6.4 The role of standards in interconnection ................................................................ 197

7. THE LICENCE APPLICATION/ADJUDICATION PROCESS ..................................... 197

7. l Limiting the number of operators to allocate limited resources ............................... 197

7.2 Principles for licensing award procedures .............................................................. 198

7 .3 Choice of licensing procedures .............................................................................. 199

169

7.4 Automatic exclusion or inclusion of certain operators from licensing award
procedures ........................................................................................................... 200

8. UNION-WIDE OPERATION ......................................................................................... 20 I

8.1 Union-wide provision of services ........................................................................... 201

8.2 Mutual recognition of mobile operating licences .................................................... 20 I

8.3 Mutual Recognition for licences awarded on the basis of first come _I_ first
serve ..................................................................................................................... 202

8.4 Open procedures where licence numbers are limited ............................................... 202

8. 5 Co-ordinated Community licensing ........................................................................ 2 0 3

8.6 Mutual recognition of type approval .................................. :····················· .............. 203

9 NUMBERING ........................................................................................ : ....................... 204

9. 1 Community policy to date ..................................................................................... 2 04

9 .2 Principles for the allocation of mobile service numbers ........................................... 204

9.3 Co-ordination of mobile service numbering at a Community level .......................... 205

9.4 Development of a European numbering space ............................................ : ........... 206

9.5 Personal and portable numbers .............................................................................. 206

10 OWN INFRASTRUCTURE AND SHARING OF INFRASTRUCTURE ....................... 206

10.1 Use of own infrastructure for mobile services ........................................................ 206

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

b) Community principles concemiHg i:he use of infrastructure ...................... 2 08

10.2 Access to sites and sharing of sites and infrastructure ............................................ 208

11 COMBINED OFFERING OF SERVICES VIA FIXED AND WIRELESS

NETWORKS .................................................................................................................. 209

11 . 1 The requirements of personal communications ....................................................... 2 09

11.2 The Telecommunications Review schedule ............................................................ 209

1 1 . 3 Combined fixed/mobile service provision ............................................................... 2 I 0

11.4 Allowing mobile operators or independent service providers to resell or switch
traffic on the fixed network after 1998 ................................................................... 2 I 0

11.5 Allowing fixed network operators to provide wireless services ............................... 210

170

11. 6 Union pnont1es in the area of licensing to prepare for the personal
conmmnications environment ................................................................................ 211

12 ACCESS TO THIRD COUNTRIES ............................................................................... 211

13 SATELLITE-BASED PERSONAL COMMUNICATIONS ............................................ 2 12

14 PROMOTING THE UNIVERSAL MOBILE TELECOMMUNICATIONS

SYSTEM (UMTS) ......................................................................................................... 213

15 CONCLUSIONS ........................................................................................................... 215

171

EXTENSION OF THE PRINCIPLES OF EUROPEAN UNION'S

TELECOMMUNICATIONS POLICY TO THE MOBILE SECTOR

INTRODUCTION

On 22 July 1993 the Council of Ministers adopted Resolution 93/C2l3/01 setting out an
overall timetable for the future development of telecommunications up to the end of the

decade.

The Council Resolution also identified "the development of a future Community policy in the
field of mobile and personal conununications" I as a major goal of Community
Telecommunications policy in the short tenn.

In extending the principles of Union telecommunications policy to mobile and personal
conununications, the provisions of the European Conununity Treaty and the consensus
achieved around the positions proposed both in the 1987 Green Paper on the development of
the Common Market for Teleconununications Services· and Equipment2 and the 1992
Tclcconununications Review3 on which Resolution 93/C2 l 3/0 l was based, form a valid basis

on which to proceed.

The Council Resolution established the schedule for full liberalisation for public voice telephony services,
namely l January 1998, with additional transitional periods of up to 5 years for Spain, Ireland, Greece and
Portugal and if justified, of up to two years for Luxembourg. See Council Resolution 93/C2 I 3/0 I or 22 .July 1993
on the review of the situation in the teleconmmnications services sector and the need for further <levdopmen l in
that market, O.J. C213, 6.8.93

2 Commission Communication of 30 June 1987, COM(87) 290 final.

- ' Commission Communication of 28 April 1993 on the Consultation on the 1992 Review or the Situation in the
Telccommu111cat10ns Services Sector, COM(93) 159.

172

1 GENERAL PRINCIPLES

Building on the general consensus achieved on the future development of teleconununications,
Union policy towards mobile and personal communications can draw on a number of basic
principles, which have been successfully applied to fixed network teleconmmnications and
satellite communications.

1.1 The provisions of the EC Treaty

These principles have been derived from the prov1s1ons of the EC Treaty ("the
Treaty"), in particular:

_Article 3(c)_ requiring the creation of an internal market characterised by the
abolition, as between Member States, of the obstacles to the free movement of

goods, persons, services and capital;

_Article 3(g)_ requiring the institution of a system ensuring that competition in the
internal market is not distorted;

_Article_ _3(1)_ strengthening the competitiveness of Conmmnity industry;

_Article 3(n)_ encouraging the establishment and development of trans-European
networks;

_Article_ 5 under which the Member States are bound to fulfil their obligations
under the Treaty;

_Articles_ _30_ _to_ _37_ concerning the free movement of goods;

_Articles 52 to 66_ concerning the freedom to provide services and the freedom of
establishment;

_Articles 85, 86_ _and_ _90_ setting out the Community competition rules:

_Articles 110 to 115_ concerning the conunon conm1ercial policy;

_Article_ _JOO(a)_ concerning the adoption of directives for the approximation of
provisions laid down by law, regulation or administrative action in the Member
States as directly affect establishment or functioning of tl~e internal market.

_Articles_ _129b_ concerning the establishment and development of creation of TransEuropean Networks.

1.2 Application of the provisions of the Treaty to the telecommunications sector

The 1987 Green Paper led the European Conununity to establish the basic approach to
what is now the European Union's teleconmmnications policy through:

         - the liberalisation of the supply and provision of tenninal and network equipment

         - the liberalisation of teleconmmnications services

         - the separation of regulatory and operational functions

173

ensuring open access conditions to networks, as well as interworking · and
interconnection through Open Network Provision (ONP)

promotion of European standardisation, through the creation of the Eu ropcan
Teleconununications Standards Institute (ETSI)

the full application of the Conununity Competition rules to the undertakings

concerned

Beyond the Treaty Articles and the principles of the 1_987 Green Paper, the
Commission has issued Guidelines on the application of competition rules to the
teleconununications sector4, as well as subsequent Conununications of the Commission
and proposals for legislation and draft Commission directives.

Community policy in the field of satellite communications was set out in a Green Paper
on a conunon approach in the field of satellite conununications and the subsequent
Council Resolution of 19 December 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 in mobile
communications

The full application of the Treaty rules to the mobile sector implies the absence or
abolition of existing exclusive and special rights in the mobile teleconmmnications
sector. Moreover, mobile and personal conmmnications must be viewed in the context
of the overall objectives of the Treaty and the new enviromncnt resulting from the
agreement on the abolition of the remaining exclusive and special rights over the
provision of voice telephony services by 1 January 1998. The relevant rules arc, in
particular, Article 59, 85, 86 and 90.

_a)_ _The_ _rules on the free movement_ _of_ _services_

Article 59 of the Treaty requires the abolition of all restnct10ns on the
freedom to provide services within the Conununity. The grant of exclusive
and special rights over the operation of mobile networks and over the
provision of mobile conmmnications services may prevent the development of
pan-European mobile operators and service providers, as well as potentially
preventing the entry of experienced mobile operators and service providers
from one Member State into other national markets.

8 _l'.'irpoge,_ Conunission Decision 91/562/EEC, OJ L306/22.

175

_b)_ _The competition rules_

While subject to the specific situation in each market segment, the existence
of exclusive rights in the mobile sector may result in a significant limitation
in the supply of mobile communications services. It may also have the effect
of slowing down the introduction of new, advanced services and competing
technologies. In the case of analogue cellular services, for example,
exclusive rights in certain Member States, have led to very uneven service
development, with problems arising such as network saturati<;m. Such
problems have been compounded in those Member States which have also
sought to maintain exclusive rights in relation to GSM.

In particular, the cumulative effect of the grant of a series of exclusive or
special rights to a single operator, without appropriate safeguards, extend
dominance in one market segment into a neighbouring market segment in
contravention of Article 86 EC and may mean that the operator has little
incentive to encourage a shift from one technology to another, in contrast to a
competitive supplier who might see subscribers to the older technology as a
key target in its marketing strategies.

The existence of a single network operator, or of a limited number chosen in
a discretionary manner or enjoying a particular advantage, in each Member
State may restrict competition by obliging both end users and service
providers to obtain both network access and service provision from a single
or limited source, without there being necessarily any technical justification
for such a tie. This restriction on customer choice can be aggravated by
regulatory restrictions on competition at the level of service provision. In the
case of radio-based communications, the competitive concerns arc
heightened by the bottleneck created by limited spectrum availability.

Exclusive rights such as these which result in such restrictive effects arc
incompatible with the competition rules and in particular Article 90 in
conjunction with Article 86.

The use of a discretionary licensing award procedure, (i.e. one not based on
objective, transparent, non-discriminatory criteria, respecting the principle of
proportionality), aggravates the restrictive effects of exclusive and special
rights; slows down technical innovation and prevents all market participants
enjoying an equal opportunity to access scarce frequency resources.

_c)_ _Possible derogations from the Treaty rules_

Under Article 90(2) the non-application of the Treaty provisions can only be
justified in cases, where their application to undertakings enjoying special
and exclusive rights _"would obstruct in law or in_ _fact_ _the_ _pe1:form{(nce_ l~f _{/_
_task_ _of_ _general economic interest"._ As an exception to the general
philosophy of the Treaty removing barriers to the creation of the internal
market and promoting a system of fair competition, the scope of this Article
is interpreted narrowly.

In the Services Directive, the continuation of the· voice monopoly was
justified under Article 90(2) because of the universal service mission at that
time assigned to public operators in all Member States. Specifically, the
voice telephony monopoly would ensure that operators retained a sufficient
revenue base for the provision of universal service.

176

9

On the other hand, the broad public consultation during 1992 lead to the
conclusion that the monopoly would no longer be required after the necessary
period of adaptation. This conclusion was shared by the Council.

Council Resolution 93/C2 l 3/02 confirms, as a result of the · 1992 Telecoms
Review that the basic voice monopoly will no longer be justified from 1
January 1998 onwards (with the exception of additional transitional periods
of up to 5 years for Spain, Ireland, Greece and Portugal and where justified 2
years for Luxembourg) even to guarantee the provision of voice telephony for
the general public via the fixed network.

Pending full liberalisation as agreed by Council, the scope of the voice
telephony reservation as an exception to the general rule of competition must
be narrowly interpreted. The definition of the voice telephony derogation
does not extend to cover analogue and digital cellular telephony services.

             - The scope of the definition in the Services Directive limits voice9
telephony to the direct transport and switching of speech over the public
telecommunications network between two network tennination points.
Mobile services are provided between one network tennination point and
a mobile base station rather than another network tennination on the

public network. Additionally, the use of mobile networks to interconnect
with leased lines, for example, to deliver traffic within corporate
networks or closed user groups, would also fall outside the definition of
voice telephony for the same reason.

Mobile services do not therefore fall within the definition of "voice
telephony" in Directive 90/388/EEC.

Moreover, on the basis of such agreement in Council, the maintenance of
exclusive or special rights in the mobile sector could not extend after the
dates agreed in Council in order to protect the reserved voice services .

             - The provision of a universal public voice service and network is unlikely
to be undermined by further liberalisation in the mobile sector before the
1 January 1998. 95% of mobile traffic originates or tem1inates on the
PSTN, thereby providing the fixed network operator with a substantial
revenue flow. Mobile services as presently supplied are therefore a
complementary source of revenue for the TOs rather than a means of bypassing their networks and services.

             - Finally, experience in competitive mobile markets both in the Union and
outside shows that the rapid growth in mobile services has not
undermined the provision of universal service. Indeed, mobile services
can make an important contribution to the achievement of the universal
service goal, for example, by providing cost effective access in remote
regions, or by providing access to emergency services when away from a
fixed network connection.

There is a need to create an environment favourable to the rapid growth of mobile
services and the evolution towards a personal communications environment. Exclusiv1:

Voice telephony is defined in Conunission Directive 90/388/EEC (Services Directive) as the commercial
. provision for the public of the direct transport and switching of speech in real time between public switched

network tennination points, enabling any user to use equipment connected to such a network tennination point in
order to communicate with another tennination point

177

and special rights in the mobile sector is creat!_ng a situation which is incompatible
with the Treaty and in particular the objectives of the internal market and the Treaty
competition rules. Moreover, these exclusive and special rights do not respond to the
current need to create an environment favourable to the rapid growth of mobile
services and the evolution towards a personal communications environment. Action is
therefore needed to tackle the pattern of exclusive and special rights within the mobile
sector. While action must take into account the specific characteristics of each market
segment, the general principles of a Union approach should include :

the abolition of exclusive and special rights in the mobile communications sector :

to the extent that Member States continue to take a teclmology-based approach to
the licensing of mobile conununications, as a general principle at least two
operators in the same geographic market for each mobile technology shou Id be
licensed on the basis of objective, non-discriminatory and transparent licensing
procedures, which are in accordance with the principle of proportionality : and

ensuring that market forces play a key role in determining the future numbers of
market participants at both the operator and service provider level. subject to the
overall application of the EC Treaty.

3 LICENSING CONDITIONS APPLICABLE TO THE OPERATION OF MOBILE

COMMUNICATIONS SYSTEMS

3.1 Basic Union principles

Conmmnity law requires the abolition of restrictions on the freedom to pro\'ide of
services within the European CommunitylO, as well as establishing the general goal set
out in Article 7A of the Treaty of the creation of the internal market. \Vithm tlh.'
framework of the Treaty and the caselaw of the Court of Justice. certain restrictions on
that freedom are nevertheless pennittcd if they fall within the exceptions on non
economic grounds provided in Article 55 and 56 of the Treaty or if they fulfil essential
requirements in the general interest and are applied without discrimination and in
proportion to the objective sought.

This approach has been carried through into the telecommunications field.,,·here

Conmmnity law according to Directive 90/388/EEC and Directive 90/387/EEC of ~O
June 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 thl.! 1.!stablishment ot' tli~ 111t~rn;il 111;1rkct !"111

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

178

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

Furthermore, the principle of non-dicrimination on grounds of nationality
established in Articles 7 and 59 of the Treaty, requires that licences must not
impose restrictions on ownership by nationals of Member States or
undertakings controlled by nationals of Member States I 2.

Mobile systems not intended for use by the general public (for example,
private mobile radio systems used by closed user groups) should not be
subject to more stringent restrictions than other non public systems using
fixed network infrastructure.

_b)_ _Justifiable restrictions in national licenses_

The Services Directive, the ONP measures and the two Directives ensuring
the mutual recognition of type approvals for tenninal equipment [13 ] have
identified the limited range of restrictions which may be imposed within
national authorisations for services or equipment intended for use by the
general public. These restrictions are limited to those justified by:

               - _essential requirements_ (namely, network security, network integrity,
prevention of frequency interference, the effective use of the frequency
spectrum and, in justified cases, interoperability of services and data
protection, and in the case of terminal equipment, user safety and the safety
of the employees of the Operator).

               - _public service requirements in the form_ _of_ _trade regulations_ (concerning
conditions to ensure the availability, pennanence and quality of the service) [14 ]

               - _the need to safeguard reserved monopoly services. where mointoined_ _in_
_accordance with Community_ _Law_

In the absence of harmonised licence conditions at a Conununity level for the
operation and provision of mobile communications, national licensing
conditions for mobile systems intended for the general public should also be
limited to these categories.

I 2 /\rlicks 4 and 36 of the Treaty establishing the European Economic Area from 1 January l 994 extends those

principles to prevent restrictions being imposed on ownership by nationals of EEA States or undertakings

controlled by nationals of EEA States (the EEA includes the Member States and Austria. Finland, Iceland.

Liechtenstein, Norway and Sweden)

13 Council Directive 911263/EEC of 29 April 1991 on the approximation of the laws of Member States concerning.

tdecommunications tenninal equipment including the mutual recognition of their confonnity; OJ L 128/ 1,

23.5. 91, as modi lied by Council Directive of 29 October 1993 supplementing Directive 91/263/EEC in res1x!ct or

satellite earth station equipment (93/97/EEC; OJ L290/l, 24.11.93.

1-1 The Services J)irective, limited the imposition of trade regulations to basic data services, namely the provision l)r

packet and circuit-switched data services for the public, subject to verification by the Commission or their

compatibility with Treaty. The provision of such basic services were seen as fonning a particular task entrusted

b~· the Member States to teleconununications organisations.

179

15

Studies carried out for the Commission 15 confinn that the majority of curn:nt
national mobile licensing conditions are consistent with one or more of these
three categories. Where this is not the case, such restrictions should be
removed.

3.2 **Essential requirements**

As discussed in 3 .1 above, restrictions imposed by National Regulatory Authorities in
the licences of mobile systems intended for the general public must not restrict access
to public mobile networks or services, except on the basis of the essential requirements
in the general interest established in Community law.

Restrictions linked to _network security, integrity_ and _interoperability l?f services_ arc
likely to apply, in particular, to interconnection with other networks and services.

The _prevention_ _of_ _frequency interference_ and the _effective_ _Ztse_ _l?f)i·eqZtency_ _spec/mm_
are specific concerns for all radio-based conmmnications.

It is essential that the proliferation of mobile conmmnications, and accompanying base
stations, antennae and handsets does not lead to unacceptable interference with other
satellite or radio conmmnications systems, or electromagnetic devices, such as hearing
aids or vehicle electronics, in accordance with Directive 89/336/EEC [1 ] Ci concerning
electromagnetic interference, and in accordance with coordination procedures agreed at
a European and international level (See section 4 below). Restrictions may go beyond
the equipment itself and extend to the qualifications and training of those installing and
maintaining mobile networks and equipment

Conditions in licences should seek to put both direct and indirect pressure on mobile
operators to use less congested parts of the spectrum and employ technology or
network configurations which maximize spectrum efficiency. This could be combined
with requirements to ensure gradual migration from less efficient to more efficient
teclmologies as these emerge.

_Dora_ _protection_ _and_ _privacy issues_ arc of general application. but the radio-based
nature of mobile conununications raises specific problems of interception of messages
and the need within mobile networks to constantly track each subscriber's location.
Mobile services should be subject to the same rules as those proposed for fixed and
satellite networks and servicesl7_ The issue is considered further at section 5 bclO\\.

See S11u~v _on_ _rhe_ _application_ _of_ _ONP_ _to_ _mobile_ _telephony,_ _mobile_ _da!a_ _networks_ _and_ _pugi11g seJT/c('S._ _P1\_

Consulting, December 1992 and _Licensing_ _and_ _Declaration_ _procedures_ _for_ _mobile_ _c·m11nw11ico1io11s_ _in.\_ _fr111her_
_S1a1es_ c~(llie _l:'C,_ KPMG ?eat Marwick Stanbrook and Hooper, August 1993

1
() Council Directive of 3 May 1989 on the approximation of the laws of the Member States relating to

electromagnetic compatibility (89/336/EEC, OJ Ll39/19, 23.5.89) and Council Directive or 28 April l lJlJ2

amending Directive 89/336/EEC on the approximation of the laws of the Member States reluting to

electromagnetic compatibility (92/31/EEC; OJ Ll26/1l,12.5.92)

17
Sec, in particular, the forthcoming amended proposal for a Council Directive covering the protection of persmd

data and privacy in the context of public digital teleconununications and in particular the Integrated Services

Digital Network (ISDN) and Public Digital Mobile Networks, - to be published.

180

3.3 Public service requirements in the form of trade regulations

The terms upon which mobile services are offered is, primarily a contractual issue
between operators, service providers and customers. Nevertheless according to the
Article 3 of the Services Directive in the case of data communications services, certain
additional licence conditions referred to as public service requirements in the fonn of
trade regulations, designed to ensure the permanence, availability and quality of a
service may, subject to verification of compatibility with the Treaty, be imposed on
the operation of services intended for the general publicl8. The same range of
conditions should be considered for mobile systems intended for use by the general
public where the number of licences which can be granted is limited on the basis of the
essential requirements.

Such conditions are commonly applied in national licences [19], and relate, inter alia, to
price levels, minimum service quality, geographi~al coverage, access to ~mergency
services, provision of facilities for the customers wi~h special needs, billing, and
conditions ensuring the financial standing and technical cqmpetence of the licensee.

In contrast, the imposition of conditions in a licence which reflect a Member State's
economic assessment of the capacity of a specific market or which would limit licences
to specific operators, cannot normally be justified under Conununity law even if the
objectiw sought may be legitimate (e.g. pennanence, of service), where other more
proportionate means of achieving that objective could be used.

In order to avoid a disproportionate regulatory burden restricting the free provision of
services or distorting competition in the Union, mobile systems not intended for the
general public should not be subject to public service requirements in the form of trade
regulations.

3.4 Duration

Variations20 in the length of licences in different Member States for similar services
can lead to considerable market distortions, both between services and between
operators thus creating significant barriers, to the development of internal market. The
presence of an established operator or teclmology can act as a significant barrier to
new market entry, ·whilst very long licence terms can restrict the dissemination of new
technologies and services and may foreclose the introduction of systems making more
efficient use of the frequency spectrum and therefore may contravene the competition

rules. Moreover, the existing patchwork of licences makes the short-term creation of
pan-European mobile communications market more difficult.

1 ~ Commission Uin.:ctive 90/388/EEC (Services Directive) already foresees such conditions t()r the provision or

packet or cin.:uit switched data services for the general public (Article 3), subject to verification by the

Commission or their compatibility with the Treaty,

I _'J_ Sec KJ>MG Stud\· Chapters 5 and 8

.:w The Kl [1] MCT Stmlv identities variations within analogue cellular networks of between 10 to 25 years with many
\lpcrato! ~; enjoying an indefinite licence period. In one case a private operator was grnnkd _ii_ I 0 )'C<tr licence

''hilst its public competitor had an indefinite tem1. In GSM licence periods range from 5 years (rcnc\\'ablc) tn

.2) \cars. Sec chapter 5

181

In accordance with the principle of subsidiarity, the duration of licences should remain
an issue for national rather than Community determination. In general, however. in
accordance with the Community competition rules and the rules on the free ·movement
of services, Member States in setting licence terms should take full account of market
forces and the need to avoid restricting the introduction of new technologies and
services.

In order to ensure no unfair restrictions on competition or undue limitation of ne\\'
technologies and s~rvices, initial licence terms and 'standstills' on further licences
should be based on the period required to ensure a sufficient start up period and/or a

conunercial return on the investment made in the service or network concerned.

3.5 **Other conditions imposed on Mobile Operators**

_a)_ _Protection_ _of_ _reserved services._

In relation to fixed network services, the Services Directive envisaged the
possibility for additional restrictions which might be required to ensure the
performance of the task of general economic interest assigned to the TO. This
was specified in the case of data services (which have now been liberalised)
and implicit in relation to the provision of voice telephony, and in particular.
the provision and exploitation of a universal service.

Until voice telephony is fully liberalised in 199821, immmum regulatory
safeguards may be envisaged to ensure that the public voice monopoly via
the fixed network is not substantially undern1ined. However, this would not
normally justify either, as discussed at section 2 above, the maintenance of
exclusive or special rights in the mobile sector, or the imposition of other
conditions in the absence of evidence of substantial network by-pass actually
occurring. The same is true for restrictions on the use of mobile networks to
provide services which are already open to competition, for example, sen·ices
to closed user groups or corporate networks.

_b)_ _License fees._

The levying of excessive fees on operators in the fonn of licence or frequency
fees can potentially create barriers incompatible with the internal market and
raise important competition issues, where the practical effect is to deter
market entry or deny users a fair share of the benefits which lower fees might
be expected to produce. They can also, if in the form of a percentage of
profits or of turnover, place considerable burdens on new operators during
the launch phase of their services.

One-off and annual fees levied on mobile operators should comply with the
principles established within ONP of non-discrimination, transparency and
proportionality.

In assessing whether fees ·charged are proportional, account must be taken of
the balance between coverage of administrative costs involved in licence and
frequency management and the real commercial value of the resource being
allocated. Fees should not be levied in a discriminatory fashion.

21 With additional transition periods of up to 5 years for Spain, Ireland, Greece and Portugal and where justiJieu 2

years for Luxembourg

0

182

_c)_ _Changes_ _o_f_ _ownership._

Provisions restricting changes in the ownership of the licensee must be
justifiable in tem1s of the needs to ensure continuing compliance with the
essential requirements or public service requirements in the fom1 of trade
regulations imposed in licences.

3.6 Promotion of competitive service provision : obligations on Mobile Operators

The role of mobile network operators in controlling a bottleneck resource creates a
difficult problem for Union policy. On the one hand, Union telecommunications policy
is seeking to promote competition, and, in particular, innovative combined service
offerings in order to meet market demand and to take the first steps towards a personal
communication environment. On the other hand, the commercial autonomy of mobile
system operators should be respected as far as possible, with regard to their basic
freedom to choose with whom they contract.

In vie\\' of:

     - the relatively rigid market structure that is likely to exist in the Community market
because of the length of current licences granted for analogue and digital mobile
technologies:

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

and

     - the fact that many mobile network operators not only control the bottleneck facility
on which competing service providers rely, but also provide mobile services
themselves and are therefore likely to favour their 0\\'11 services ;

it appears that action is required to promote the development of effective competition
through third party provision of mobile conununications services.

Competition policy in the area of selective distribution nonnally precludes any
limitation on the number of distributors appointed unless justified under the
competition rules. This means that mobile network operators should, in line with their
obligation to provide open, transparent and non-discriminatory conditions for
interconnection (Sec section 6 below) be obliged to accept all reasonable requests _b!_
Service Providers to deal, within the limits of nonnal commercial practice and the
Treaty competition rules (including requests from service providers integrated into
other mobile network operations).

In addition to the remedies provided by the competition rules, it should be possible to
bring any refusal to deal to the attention of the National Regulatory Authorities or
other competent body.

_3._ 7 Conditions applying to Service Providers and the provision of mobile

communications services

Jn contrast to the operation of mobile systems, where the use of a scarce physical
resource - the frequency spectrum - provides the basic justification for licensing and

183

other regulatory safeguards being imposed on m?bile network operators, the provision
of mobile and personal communications services should not be subject to licensing.

_a)_ _Service provision not_ _to_ _be subject_ _to_ _licensing_

Service providers, whether independent or forming part of or integrated into mobile
network operations, should not be subject to any licensing procedures and may be
required only to make a declaration or notification of their activities to the National
Regulatory Authority(ies) of the Member State(s) where they choose to operate.

In order to promote the maximum level of competition in the provision of mobile
services, given the relatively rigid current licensing structure for mobile systems.
restrictions should not be imposed which oblige or prevent service provision via
independent service providers or via an integrated part of a mobile operator's business.
Existing restrictions of this type should be abolished.

Further, subject to the application of the Treaty competition mles, Service Providers
should not be restricted from offering im1ovative combinations of different mobile
services, such as voice and paging services, or from providing mobile conununications
services throughout the European Union.

_b)_ _Ensuring compliance with essential requirements_ _and_ _public_ _service_
_requirements in the form_ _of_ _trade regulations_

The imposition of regulatory controls and licence conditions on service prondcrs.
whether independent or integrated into or fonning part of mobile network operations.
would be disproportionate to the objectives sought at the level of service provision.

In practice, compliance with the essential requirements and public service requirements
in the fom1 of trade regulations will be secured through the obligations placed on the
mobile operators whose services are being provided. The imposition of additional
safeguards on service providers would add to their administrative overheads.
potentially restrict technical and service innovation, and limit competition both '' ithin
and between different mobile technologies.

Regulatory safeguards currently imposed on service providers should be replaced b~
an agreed voluntary _Code_ _of_ _Conduct._ This code should, in pa11icular, identit~· 011 the
basis of voluntary participation by Service Providers, measures and standard busi111:ss
practices, designed to safeguard the essential requirements.

It should also embody standards with regard to pem1anence, availability and quality of
service, as well as guidelines concerning teclmical, financial and commercial practices.
In relation to commercial practices, the Code should promote commercial beha,·iour
which is entirely consistent with the Conmmnity competition rules, in particular. to
avoid market sharing or anti-competitive pricing arrangements bet,veen operators or
between service providers, and/or resale price maintenance bet\vecn operators ~UH.I
service providers as well as preventing anti-competitive cross-subsidies bct\\1.'1.'n
service revenues and mobile terminals. The Code of Conduct ma' inclll(.k
commitments in relation to the qualifications and training of staff

The Code should also seek to ensure a high level of consuma protection. in particular
by encouraging transparency in tenns of pricing of services and customer contracts.

184

and where appropriate should provide mechanisms for dispute resolution and
remedies [22 ] .

Any national declaration procedure for Service Providers may also require them to
indicate whether they participate in the Code of Conduct.

4. FREQUENCIES

4.1 Application of Union policy to radiofrequencies

The basic principles of Union policy with regard to access to radiofrequencies are
found in the ONP Framework Directive, and in general principles, such as the
separation of operational and regulatory act1v1t1es, established by the
Telecommunications Services Directive and the 1987 Green Paper.

Article 2( 10) of the ONP Framework Directive provides for ONP conditions relating to

1
usage "including access to frequencies where required'       - 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 services [23 ] . 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)2 [4 ] 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 coordination of radiofrequencies must respect the principle of separation of regulatory
and operational duties, while opinions from service providers, industry, users and
standards bodies in researching the frequencies best suited to future applications
should be sought.

Resolution 90/C 166/2 calls for the promotion of the most efficient use of frequency
spectrum, taking timely account of service provider and user requirements in the light
of new standards and technologies.

Radiofrequency use must take place in accordance with the radioregulations of the
International Telecommunications Union (ITU). Within this environment, work should
proceed towards the timely allocation of sufficient frequency . resources for the
emerging mobile and satellite applications.

A further objective of efficient frequency planning should be to teclmically maximise
the number of pot~ntial mobile operators, which implies there may be the teclmical
potential for more than 2 operators of a given servic~ .

. Failure to promote mechanisms for the most efficient use of the spectrum or to ensure
migration to new efficient teclmologies would undermine the competition principles in
the Treaty. In particular, it would delay the dissemination of new and advanced
teclmologies, and reinforce the competitive advantage of existing inefficient operators.

A coo~dinated approach to frequency allocation is also vital to minimise the possibility
of frequency interference, in particular, in border areas.

The framework for frequency coordination in Europe has been defined in Council
Resolution 90/C 166/02, Council Resolution 92/C3 l 8/l, and the Conclusions of the
Council on 7 December 1993, in rt!sponse to the Commissions Communication on the
New Approach to Frequency Coordination26. These identify the European
Radiocommunications Coinritittee,' and its European Radiocommunications Office
(ERC), as the basic forum for such 0 ~ordination27. Given the importance attached to

this forum by the Community, the Commission intends to develop, as soon as the
appropriate legal framework is in place and in a manner consistent with Treaty

24 For more detailed consideration of CEPT's role in the frequency field, see Annex B.

25
Council Resolution 90/166/02 of 28 June 1990 on the strengthening of the Europe-wide cooperation on radio
frequencies, in particular with regard to services with a pan-European dimension, OJ C 166, 7.7.90

26
A new approach to the coordination of radiofrequencies in the Community, conununication from the Commission
concerning the proposal for a Council Decision on the implementation by the Member States of measures
concerning Radiofrequencies, COM(93) 382,10.9.93.

2 [7 ] For more detailed consideration of the ERC and ERO, see Annex B.

186

28

obligations, a relationship with these two bodies similar to that which it has developed
with the European Telecommunications Standardisation Institute28.

This will advance priority work areas in the frequency field and ensure that Union
interests are safeguarded. Once again, a key concern will be to ensure efficient,
transparent procedures at a Community level which prevent the creation of barriers to
the internal market. This will involve monitoring not only of the decisions taken by
these bodies, but also the speed and extent to which ERC Decisions arc actually
implemented by the Member States.

**4.4** **Priorities** **in** **the field** **of** **frequency co-ordination**

A number of immediate priorities for radiofrequency co-ordination for mobile
conununications in Europe result from the requirement to implement in the Union
decisions taken at the World Administrative Radio Conference - W ARC 92. These

reflect the general worldwide trend discussed in Annexes A, B and C towards personal
conununications services.

As regards radiofrequencies for systems intended for the general public, short term
priorities should include the establishment of decisions, and their practical
implementation by the Member States, designating European and Community
frequencies within the bands agreed at WARC for future use by terrestrial mobile
communications and satellite-based communications systems.

In particular, this should include a firm commitment to conunon bands for DCS-l 800
services, for future Universal Mobile Teleconmrnnications Services (UMTS), and for
frequency bands for satellite-based personal conununications systems (including Low
Earth Orbiting (LEO) Systems).

Sec, _A_ _11ew_ _approach_ _to_ _the coordination_ _of_ _radiofrequencies_ _in_ _the Community,_ Communication from the

Commission, COM(93)382, 10.9.93. The main elements of the new approach envisaged by the C01.1111issio11 in

the Communication of 10 September 1993 are as follows:

- As a first step, a decision as to whether Community action is required in particular areas or radio
frequencies will be decided according to defined criteria;

- The Council based on a Commission proposal, will adopt an annual work progranune relating to

work in the frequency field, including Work Requirements to the ERO to carry out the necessary technical work

aiming at identifying appropriate frequency ranges.

- If binding measures are needed, Conununity legislation would not be proposed in a given area if

the measures proposed by these teclmical bodies are in confonnity with Conununity interests; all Member States

implement the measures within a reasonable time scale and all measures arc transposed into national law as

follows:

all measures are implemented in confonnity with the requirements set out for the appropriate transposition
or Community Directives in national law,

Member States transmit to the Commission within a reasonable period, the text of the laws, regulations and
administrative provisions necessary to comply with each ERC Decision,

the Conunission will publish in the Official Journal references to the implementing texts, in on.lcr to achie\"c
adequate transparency.

if any or the above conditions are not met, the Conunission will propose 3 Conummity instrument for adoption.

187

Decisions should also firmly identify standards to be used, either ex1stmg or m
development, as well as firm schedules for the progressive availability of the
frequencies concerned leading to full implementation by the Member States.

As regards systems intended for own use or for the use of closed user groups (private
mobile radio and mobile data services), an immediate priority should be a decision
designating frequency bands, (including a time schedule for their availability), for
systems using the European digital trunking standard (TETRA). This will be of
particular importance, in the context of the increasing co-operation between police
forces and between public authorities within the framework of the Treaty on European
Union and the Schengen Agreement [29 ] .

4.5 Community approach to frequency planning and coordination at an international

level

Council Resolution 90/C 166/02 also calls for developing conunon European positions
in relation to the use and harn1onisation of the frequency spectrum at an international
level. While NRAs take individual national decisions· on the assigm11ent of frequencies
and reach certain collective decisions within the forum of the CEPT, the scope of such
decisions is limited by agreements at the international level within the ITU, in
particular those taken at W ARC 92. Those agreements have the force of a treaty. It
should be recalled that, Member States are required to ensure that international
conunitments, entered into after the date of entry into force of the EC Treaty arc
applied in a mam1er consistent with Community law and policy. It is therefore usual
practice that the Member States enter into the minutes of such conferences that they
will apply the results of the conference in accordance with Conununity lavv.

A conunon European position was followed at W ARC 92, where important decisions
were taken concerning mobile and other, more specific allocations at both lower and
higher frequencies. These changes, will in time, pennit wider use of the band l -3 GHz
for mobile services, both terrestrial and satellite based30.

The Commission intends to follow such an approach at future WRCs. so that the
global Conununity priorities are integrated into worldwide planning as a means of
boosting the competitive position of industry in the European Union. Community
priorities in relation to regional frequency coordination should be reflected in. the
Conmmnity's approach to WRC '95 and WRC '97.

5. DAT A PROTECTION AND PROTECTION OF PRIVACY

In the absence of a co-ordinated Conmmnity approach towards both data protection
and data privacy issues, ten Member States have adopted their own laws placing
restrictions on teleconununications services and data processing designed to ensure
adequate data protection. The level of protection varies considerably from Member
State to Member State creating significant distortions for the internal market. Most of
these laws target general data protection and privacy issues, rather than being

29 Other areas to he addressed should include wireless Local Area Networks and Wireless Local Loop and
comnnmications for use in transport systems, for example, systems allowing conummications whilst travelling b~·

train.

30
1:or more detailed considerations of the results ofWARC 92, see Annex C, section 9.

188

specifically targeted at either the fixed or mobile networks or the most modem digital
technologies.

Concerns about such barriers and the issue of data protection in general were raised in
the 1987 Green Paper, where data protection and privacy was identified as a major
sectoral goal. In 1990 the Commission tabled a package of proposals (including t\vo
draft directives) concerning personal data and information security, as a central
element in the Single Market programme3 I.

The general data protection Directive establishes principles which will apply
horizontally to all aspects of data protection within the internal market. A specific
telecommunications data protection Directive, adapts these as far as is necessary to the
data protection and privacy issues inherent in digital telecommunications teclmology.

When adopted, this specific telecommunications Directive will:

- Limit the period of storage of sensitive billing data which would allow a subscriber
to be identified;

- Require per line or per call elimination at the caller's request of Calling Line
Identification ;

- Limit call forwarding to a third party number only with the consent of the third
party; and

- Provide a right not to receive unsolicited calls

Further development of this framework may be needed to address the issues raised by
mobile communications. Whilst the move from analogue to digital technologies will in
general substantially reduce the possibilities for unauthorised interception of mobile
communications through the use of highly sophisticated encryption teclmiques, it also
adds urgency to the need for a clear framework for effective data security, storage,
processing and privacy. This will require a precise monitoring of the effective
operation of the General Data Protection Directive and the specific
Telecommunications Directive. This framework should develop, in particular. in
relation to:

_The protection_ _of_ _personal details concerning subscribers_ (for example, there is a
need to ensure use by service providers is restricted to registration and billing
purposes only; the need to ensure that d~ta relating to credit-worthiness and billing
information is not communicated to third parties l

_Security_ _of_ _the call_

31 Amended proposal for a Cm.~ncil Directive on the protection of individuals with regard to the processing or

personal data and on the free movement of such data, COM (92) 422, 15.12.92 ("the general data protection

directive") and the forthcoming Modified proposal for a Council Directive concerning the protection of personal

data and privacy in the context of public digital telecommunications network, in particular the Integrated

Services Digital Network and digital mobile networks (not yet published)

189

         - _The confidentiality_ _of_ _the subscriber's movements_ (Need to ensure that a caller or
third party is not aware of called party's location32; need to limit disclosure of
called party's location to roaming partners and _I_ or service providers strictly for
billing purposes only).

At the same time, access to and storage of operationaJ and call data processed in the
context of mobile telecommunications networks, is a vital component of effective
service provision. Access must therefore be subject to,the Conmrnnity competition
rules, within the limits of data privacy established above.

With regard to the future approach towards personal communications, consideration
should be given to appropriate solutions, providing, for example, the necessary degree
of flexibility in relation to caller identification for the different market pa1ticipants and
different services, This should take into account of experience in other areas, in
particular, in i·elation to caller identification in digital fixed networks and experience in

relation to videotex services.

Security of information systems has been addressed 'in a more general context in the
framework of the European Communities action plan on this issue, established by
Council Decision 92/242/EEC [33] . With regard to mobile and personal communication
systems, major issues are raised by authentication, prevention of fraud, protection of
network management, databases and service providers [34] .

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 Opcrators [35], 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

3 [7 ] Council Directive 92/44/EEC of 5 June 1992 on the application of Open Network Provision to Leased Lines, OJ

Ll65/27, 9.6.92

38 The application of the ONP Framework in strictly legal tenns is currently still linked i.n general to nd\\ork
operators enjoying exclusive or special rights. In the context of the implementation of Council Resolution
93/C213/0l of 22 July 1993 on the review of the situation in the teleconununication sector and the Council
Resolution of 7 December 1993 on Universal Service, the Conunission has declared at the Council or 7

December 1993 that within the review of the Open Network Provision Framework foreseen \\'ithin the regulator>·

adjustments required by these resolutions by 1 January 1996, it is likely that the application of Open Net\\ ork

Provision will be based on market position and no longer on exclusive and special rights.

The discussion of ONP Principles in the sector should be read with this Declaration in mind.

191

objective criteria, be transparent and non-discriminatory, and be compatible with the
principle of proportionality [39] . 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/EEC [40 ] . 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 multinetwork environment when calls may be routed over several linked public
networks, steps should be taken to ensure that the end-to-end quality of the
call is not unduly impaired. This implies 'rules' (which may be voluntary or
mandatory) governing both the quality of individual networks and the routing
of individual calls.

Up to now, ITU recommendations have proved adequate to secure end-to-end
quality for international calls. However, the traditional architecture of the
international telephone network is challenged by the introduction of mobile
systems, and new 'rules' must be formulated.

In a strongly competitive market, this type of voluntary recommendations
established in an international context may prove inadequate, so that
additional action may be required in order to ensure the quality of services.

_b)_ _Interconnection_

Principles for interconnection are contained within the various Directives and
recommendations drawn up within ONP. ONP was developed among other
reasons, to ensure competitive equality when services were liberalised.

l'J When.: an operator has both a fixed and a mobile network there needs to be adequate separation. in particubr

concerning their accounting practices.

40 Directive 91/263/EEC of 29 April 1991 on 'The approximation of the laws of the Mcmher States 1.:om:crning

telecommunications tenninal equipment, including the mutual recognition of their confonnity', 0.1 L 128. 23 ) (J l

192

Community regulatory policy places no line-of-business restnctions
preventing fixed network operators from offering competitive services over
their ov..11 networks, but does require that there is fair competition for all
competitive service providers at the interface to the fixed network.

The interconnection of mobile communications must be consistent with

certain basic principles of transparency, non discrimination and equality of
access to the fixed network. ONP conditions concern technical interfaces,
tariffs,, and .supply and usage conditions.

_c)_ _Provisions_ _of_ _the ONP Leased Lines Directive_

Whilst the ONP Leased Lines Directive does not single out mobile services
specifically, it provides important foundations which benefit mobile services
of all types to the extent that they rely on leased line capacity41

An important safeguard is the requirement that:

_"national_ _regulatory_ _authorities_ _shall_ _ensure_ _that_
_telecommunications organisations adhere_ _to_ _the principle_ _of_ _non-_
_discrimination_ _when_ _they_ _make_ _use_ _of_ _the_ _public_
_telecommunications network_ _for_ _providing services which are or_
_may be provided by other service providers._ _When_
_telecommunications organisatior.s use leased lines for the_
_provision_ _of_ _services not covered by special and/or exclusive_
_rights, the same type_ _of_ _leased line must be provided_ _to_ _other_
_users_ _on_ _request and under equal conditions._ "(Article 8(2))

In the mobile environn1ent, this means that where a fixed network operator
also offers a mobile service, the leased line facilities made available to its
integrated mobile business must be provided on equal conditions to t!1e leased
lines offered to other third party mobile service providers. Tile important
elements of cost, delivery time and types of teclmical interface arc all
included in this requirement.

The Directive alsc sets up a new type of conciliation procedure, so that users
complaining of actual or potential injury cau~ed by an infringement of the
provisions of this Directive, particularly regarding intra-Conmmnity leased
lines, have the right of appeal to their national regulat0ry authority and also
to the Commission.

_d)_ _Provisions_ _of_ _ONP_ _Voice_ _Telephony Directive_

The Common Position of ONP Voice Telephony Directive, which is expected
to come into force in early 1995, places obligations on the operators of fixed

41 Council Directive 92/44/EEC requires, inter alia:

abolition of technical restrictions on the intercom1ection of leased lines with each other or with the public

switched network

publication or infonnation about leased line offerings

tariffs which are cost-oriented and independent of the type of application for which the lines will be used.

hannoniscd provision throughout the Community of a minimum set of leased lines, including c.maloguc lines,
digital 64 kbit/s and 2Mbit/s lines

193

42

networks to provide access to mobile network operators42. The Directive
makes no distinction between interconiiecting circuits used for the exchange
of traffic and interconnecting circuits used for the exchange of signalling
information; both are covered by the provisions.

6.2 The future role of ONP in mobile systems and interfaces

_a)_ _The_ _fixed/mobile interface_

The Common Position on the Voice Telephony Directive sets out a
framework for interconnection of mobile and fixed networks.

The essence of this framework is that interconnection is a matter of
commercial agreement between operators, in accordance with Community
law, subject to general supervision by the NRA (which may involve setting _a_
_priori_ requirements). The NRA also has a role in dispt.Je resolution.

The Conunon Position by Cow1cil of 1.7.1993 provides that:

- Fixed network operators must accept all reasonable requests for interc01mection from mobile network
operators in the same Member State.

- Member States may decide that certain mobile network operators have the right to request interconnection

with fixed networks in other Member States. Names to be notified to the Conunission for publication in the

Official Journal.

- Notified Mobile network operators may request interconnection to the fixed networks in other Member

States, but in this case there is, currently, no obligation to meet such reasonable requests.

- Fixed network operators, however, cannot refuse a request for interc01mection from a mobik 111.:t\\'ork
operator in either the same or another Member State, without prior agreement of his national regulator:
authority.

- Right of the NRA to intervene to set conditions, which ensure that interc01mection conditions arc nondiscriminatory, 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, nondiscriminatory, 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 adopt [4] 4.

-l·l Thl~ stud1,~s c<.uTicd out for the Commission show considerable divergence in the approach to mobile licensing in

tlic Co111111unity and throughout the world. Approaches include the use of 'tirst-come, rirst-Sl'J"\\:d' (used ti.n

t111qi11lrn\·ers1al and snwll scale licensing., e.g. private mobile radio), comparative bidding ("beaut\ pm<.1des.

\\ llkh used throughout the Community"), auctions (used outside the Community and for USM in ()reecc) :i11LI.

199

The allocation of licences on the basis of _'jirst-c,,ome, first-served"_ effectively removes
all discretion from the Member State, beyond ensuring compliance with certain
minimum technical and financial criteria. Such an approach is consistent with the
open market philosophy of the internal market, but is perceived as being mainly suited
to use with systems having smaller scale, such as PMR.

_Comparative bidding_ or 'the beauty parade' is the most conm1only used method for the
allocation of mobile conmmnications licences in the Union. At its best it meets many
goals of Union policy by allowing Member States to select those potential operators
who can most success.fully meet the objective of the essential requirements such as
efficient frequency use, and any public service requirements in the form of trade
regulations such as quality of service and availability, meet consumer needs. and
provide an affordable service to customers.

_Auctioning_ licences and the accompanying frequency spectrum arguably allo\vs the

market to choose which services and technologies obtain valuable and scarce frequency
resources. It also acts as an incentive to use spectrum as efficiently as possible in
order to maximise the return on the investment \Vhich the up front auction kc
represents. Finally, auctioning removes Member State discretion and often meets
national policy objectives in tenns of maximizing revenues.

However, the studies carried out for the Conm1ission and other conunents express
considerable doubt concerning reliance on auctions. It is argued that auctions can lead
to excessive transfers to the public budget or for other purposes to the detriment of
10\ver tariffs for the user, and that they may favour publicly O\v11ed operators \vho may
benefit from cheaper credit, and may be subject to less stringent rate of return le\ eb
than privately-0\vned competitors.

Furthennore, competitive safeguards may be needed, in order to ensure that the highest
bidder is genuinely conunitted to the provision of mobile communications.

The Conunission does not at this stage take a view on the merits of one of tlh.'SL'
systems over another, but submits the issue to consultation. However. in the case of
lotteries, - a method which has not been widely used in the Union - the Commission
does not believe they can offer effective guarantees as to efficient spectrum use.
teclmical competence and financial standing of the successful party.

7.4 Automatic exclusion or inclusion of certain operators from licensing award
procedures

The fundamental objective of the internal market. as \\ell as the pmmtlL'S ul
Community competition policy, require the removal of unjustified b~uriers tG thL'
development of mobile communications services. A key clement in this is the n.:moval
of artificial restrictions on qualification for licensing procedures for mobile
communications licences, either, for example, by the automatic disqualification of bids
from the existing fixed or mobile network operators or the automatic grant of at le~1st
one licence to the public operator for each mobile technology \\'ithout any adjudicat1lm
procedure45.

lottcri..:s qm;viousl;. 1 us..:d in lauw.:hing analogul.! mobik sl.!rvic..:s in tho.: lJSJ\) ~..:c _f..P\_ _fl_ _i_ .\'1t1d1·. < _'ou;'""'_,\

_f,.l'f)/w1<I_ and _bite/is._

--t5 Si.!!..! KPl\KL Chapter 5.2.

200

Subject to the Community compet1t1on rules and conditions relating to technical
competence and financial standing, licensing procedures should be open to all nationals
of Member States of the Union and enterprises controlled by nationals of the Member
States or of the European Economic Area (EEA).

The automatic grant by a Member State of one or more licences to a specific operator
would be inconsistent with the concept of open, non-discriminatory and transparent
licensing procedures.

8. UNION-WIDE OPERATION

Despite the Community initiatives to date, mobile communications in the European Union is
still structured around a series of parallel, separate national networks. There are no genuine
trans-European mobile operators or mobile service providers under current licensing and
regulatory structures in the Union

8.1 Union-wide provision of services

The GSM network represents the first digital pan-European infrastructure and is
supported by a number of commercial and technical roaming agreements which are to
pem1it subscribers to obtain GSM services, via other GSM networks outside their
country of subscription.

Whilst Union policy strongly supports industry-led initiatives to promote cross-border
roaming, the bottleneck imposed by current national licensing of       - mobile networks
could be overcome by the removal of restrictions on mobile service providers. Mobile
Service Providers established in one Member State should be able to establish

themselves and/or offer services throughout the Union.

To achieve this, and consistent with the provisions of Article 59 of the Treaty, any
national declaration required made by the Service Provider in its home State should be
subject to full mutual recognition in all Member States. Additionally, conm1ercial
relationships entered into by Service Providers and mobile network operators in one
State should be fully recognised in all other Member States, covered by those
agreements, and should not be used as a ground to restrict the activities.

In particular, the provision of services on the basis of roaming agreements should not
be subject to any restriction or to any surcharge or equivalent measures unrelated to
the actual cost of providing the roaming facility itself; whether imposed as a result of
regulatory activity or other action.

8.2 Mutual recognition of mobile operating licences

The principle of mutual recognition, established on the basis of Article 5 9 of the
Treaty should apply, in the absence of harmonised licence conditions at a Union level,
wherever practicable. On the basis of the freedom to provide services in the
Community, a general principle of mutual recognition of licences and other regulatory
measures under which services are provided in one Member State has been established
through the case law of the Court of Justice, as a means of reducing restrictions to a
minimum and, in particular, removing the unnecessary duplication of regulatory

201

safeguards on the provision of pan-European services [46] . This avoids, in the absence of
harmonised licence conditions at a Union level, further licences and other
administrative measures being r~ired in other Member States. The only exception is
where such licences can be justified on the basis of non discriminatory requirements in
the public interest and such interests are not already ptotected by the rules in the
operator's home Member State. Such an approach is consistent with the removal of
special rights in the sector, as it limits Member State discretion with regard to
operators already licensed in other Member States.

Nevertheless, where legitimate technical grounds as set out, limit the number 'of
licences allocated, the principle of full mutual recognition can no longer be fully
applied.

The Commission has proposed two directives for the mutual r~tion of licences
and national authorisations in the field of telecommunications and in particular in the
field of satellite communications. This proposed scheme currently excludes mobile
communications (except for satellite based mobile communications), and in any event,
makes mutual recognition subject to availability of frequencies.

8.3 Mutual Recognition for licences awarded on the basis of first come _I_ first serve

The principle of mutual recognition of national licences concerns, in particular, those
cases where licences are awarded on a first come _I_ first seryed basis, subject to the
availability of the required frequency resources.

This should concern, in particular, satellite-based mobile communications services, as
put forward in the proposal for a Directive on the mutual recognition of satellite
service licences47.

It could also apply to local or regional systems, usually P AMR and PMR systems,
covering, for example, border regions where the systems operated by taxi businesses or
haulage companies could then be used on both sides of the frontier.

Additionally, the scope of such a system ·of mutual r~tion should be broa~ enough
to ensure that where 'private' fixed links, provided either by the operator or by a third
party on its behalf, form the backbone of such P AMR or PMR systems, a similar right

to establish fixed links isalso extended to other Member States.

8.4 Open procedures where licence numbers are limited

Where, however, because of spectrum availability, Member States rely on award
procedures based, for example, on comparative bidding, the principle of mutual
recognition cannot be fully applied. In such cases, national award procedures should
nevertheless ensure that licence applications by nationals or companies controlled by
nationals of Member States or of the EEA are possible on a non-discriminatory basis ..

46
See Commission interpretive conummi.cation 93/C334/03 concerning the free movement of services across
frontiers, OJ C334/03, 9.12.93

47 Proposal for a European Parliament and CoWlcil Directive on a policy for the mutual recognition of licences and
other national authorisations for the provision of network satellite services and/or satellite conununications
services, COM(93) 652, 4.1.94 • to be published. The proposed directive will also apply to mobile satellite
services.

202

8.5 Co-ordinated Community licensing

Articles 3(n) and 128(b) of the EC Treaty recognise as a goal of the Conununity the
encouragement of the establishment of trans-European networks. This objective,
introduced as a result of the Treaty on European Union is wholly consistent with the
Community's policy dating back to the 1987 Green Paper of promoting pan-European

networks and services.

In order to consolidate the advantages which mobile communications currently enjoys,
and to foster the development of a pan-European focus in the evolution towards a
personal communications environment, a new approach should be developed at a
Community level. This approach should allow, in particular cases, for future
technologies and services to evolve on the basis of a single 'experimental operating
licences' covering both network operation and frequency allocation, issued in a
coordinated manner between Member States and/or at a Community level. Any such
experimental licensing system should take due account of the interests of the Member

States and of existing licensed operators.

In particular, and in accordance with the Council Resolution of 7 December 1993 on
the introduction of satellite-based personal communications in the European
Conmmnity, licences for such future satellite based personal conmmnication systems

should be awarded on this basis.

Another case should be the licensing of future 3rd Generation UMTS systems.
Allocating such systems on a Europe-wide basis would substantially reinforce
European momentum towards the development of such systems.

8.6 Mutual recognition of type approval

The principle of mutual recognition of type approvals for mobile tenninal equipment is
already incorporated into Community law, within the framework of Directive
9 l/263/EEC48, which established the mechanism for the mutual recognition of
tenninal equipment type approvals based on Conm1on Teclmical Regulations (CTRs).

In practice, if CTRs exist, they are mandatory. Where CTRs have not yet been agreed
and where one or more harmonised standard(s) based on a European
Teleconmmnications Standard (ETS) or one or more ETS could be identified (on an
interim basis pending adoption of a CTR), which covers at least the essential
requirements set out in Article 4 of Directive 91/263/EEC, such ETS could be used to
perform the evaluation of conformity against the essential requirements. However this
evaluation (type-approval) must be perfonned following one of the routes established
in that Directive (for example, EC-type examination and Declaration of conformity by
a manufacturer). '

To facilitate the removal of obstacles to the free circulation of terminal and nct,,·ork
equipment in the absence of CTRs, the establislm1ent of interim type approval
procedures on a temporary basis in the context of the European Radiocommunications
Conm1ittee (ERC) taking account of the obligations flowing from Article 30 of the

48 Council Directive 91/263/EEC of 29 April 1991 on the approximation of the laws of the Member States
concerning telecommunications tenninal equipment including the mutual recognition of their confonnity, 0.1
Ll28/l, 23.05.91 as amended by Council Directive 93/97/EEC of29 October 1993 supplementing directive
93/263/EEC in respect of satellite earth station equipment, OJ L290/1, 24.11. 93.

203

Treaty should be examined in order to facilitate full mutual recognition on the basis of
confinnity with the essential requirements. This should be done in accordance with the
procedures foreseen in the Directive and the principles of the Council Resolution on the
new approach to technical harmonisation and standards and the conununication on a
global approach to certification and testing49.

9 NUMBERING

In addition to radio frequencies, access to and allocation of numbers is a second essential
resource for mobile network operators, service providers and for customers. The importance
of this resource and its potential to restrict or distort competition in a mam1er contrary to the
Treaty competition rules will grow as demand for numbering becomes more acute and as
services evolve towards the personal communications environment. It is vital that fair access
to numbers is achieved and that where teclmically feasible, customers can take numbers with
them, as they switch between operators or service providers.

9.1 Community policy to date

At present, numbering arrangements remain the responsibility of the Member States
within the overall framework of the international standards and the regional and
country code allocations established within the ITU. Such standards cover, for
example, overall number length and reconunendations on number structure.
Responsibility for number allocation currently lies either with NRAs or the incumbent
Tcleconmmnications Organisation.

Numbering policy within the Union has so far concentrated on limited
ham1onisation 50:

a conu11on European emergency number - 112 m parallel to existing national
numbers, and

a conunon international access code - 00

9.2 Principles for the allocation of mobile service numbers

The Conmmnity framework for access to and the administration of numbering schemes
for all voice telephony services has been set out in the proposed Voice Telephony
directive. The approach, building on the general principles of ONP is analogous to
that taken in the sphere of radiofrequencies5 l.

49
Council Resolution 85/C 136/01 of 7 May 1985, OJ C 136/1,4.6.85 and communication of the Commission 011 a

Global Approach to Certification and Testing of 15 June 1989, COM(89)209, OJ C267/3,l 9. I0.89.

50

51

Council Decision 91/396/EEC of 29 July 1991 on the introduction of a singk emergency call number, OJ

C2 I 7 /3 l, 6. 8. 91 and Council Decision 92/264/EEC of 11 May 1992 on the introduction or a standard

international telephone access code in the Community, OJ Ll65/27

/\.new approach to the coordination of radiofrequencies in the Conununity, conununication from the Commission

concerning the proposal for a Council Decision on the implementation by the Member States or measures

concerning Radiofrequencies, COM(93) 382,10.9.93.

204

This implies that numbers are allocated on the basis of objective criteria and
transparent procedures, must guarantee equality of access to number resources and be
non-discriminatory.

Additionally, Member States shall ensure that the control of national numbering plans
is the responsibility of the NRAs. NRAs shall ensure that national numbering plans,
and all changes to them, are published, subject only to limitations justified on the basis
of the Treaty or compliance with essential requirements, in particular, privacy or data
protection.

9 .3 Co-ordination of mobile service numbering at a Community level

The basic approach to numbering plans, allocation and coordination of numbering has
been set out in Council Resolution 92/C3 l 8/025 [2], which requires respect for the
principle of separation of operational and regulatory activities and decisions to be
based on wide consultation of interested parties. It also recognises the need for a
coordinated and efficient approach to numbering at a European level. It identifies
Europe-wide mobile services as a high priority area for developing coordinated
management and allocation within a European numbering space.

The Resolution establishes a policy framework similar to that proposed in the field of
frequencies, involving the wider European forum provided by CEPT, and in particular,
ECTRA and the linked future European Telecommunications Office (ETO) and the
European Numbering Office (ENO) within it.

ENO's tasks would be:

research to support long term development of numbering plans taking into account
the needs of national regulators, operators, service providers, users and other
interested parties;

coordination of the development of national numbering plans within and between
the CEPT member countries;

developing common approaches for the future management and allocation of
numbers both nationally and internationally; and

development of a common European position with respect to ITU activities and
development of the links between numbering and standards.

In a similar approach to that taken in relation to frequencies, the Commission intends
to develop, as soon as the appropriate legal framework is in place, a stable relationship
with these two bodies in order to advance co-ordination in the numbering field and
ensure that Union interests are safeguarded. A key concern will be ensuring efficient,
transparent procedures at a Community level which prevent the creation of barriers to
the development of the internal market based on an analysis to be made thereupon and
to ensure the full practical implementation by Member States of decisions concerning
numbering.

52
Council Resolution 92/C3 l 8/02 of 19 November 1992 on the promotion of Europe-wide cooperation on
numbering of telecommunications services, OJ C3 l 8/2, 4.12. 92

205

Common positions must also be developed at a Community level towards numbering
issues within international bodies, such as the ITU numbering fora, in order to
safeguard Union interests.

9.4 Development of a European numbering space

At present, each country has its own unique country code within which it establishes a
national numbering plan. Council Resolution 92/C3 l 8/08 also supported in addition
to the existing national allocations, that Europe should introduce a European
Numbering Space (ENS) i.e. a common numbering space which is not aligned to any
individual country.

One of the key potential primary uses of a future ENS is mobile and personal
conununications services, in particular, where these provide pan-European or roaming
capabilities.

In order to facilitate this possibility, suitable branded allocations for these services
should be made available from within the ENS.

9.5 Personal and portable numbers

Within the framework of European coordination, pnonty should be given to the
creation of a European Numbering Space, and within that, to the reforn1 of national
numbering schemes to ensure equality of treatment between mobile numbering and
fixed network numbering schemes; to the issue of number portability across similar
mobile services where this is technically feasible, and to the evolution towards personal
numbering.

In this context, special attention should be given to harmonisation of access codes for
mobile systems, directory services and for services of general interest, such as the
emergency services.

In the future evolution towards personal communications, priority should be given to
personal, portable numbers, independent of the network provider, the individual service
type, the location (nationally or internationally) and the individual tem1inal equipment.

At this stage it will however be necessary to ensure that current and future numbering
plans are sufficiently flexible to accommodate allocation of such numbers from either
national numbering plans or from the European Numbering Space.

10 OWN INFRASTRUCTURE AND SHARING OF INFRASTRUCTURE

10.1 Use of own infrastructure for mobile services

As evidenced elsewhere (see Annex B), current regulatory restrictions on the selfprovision of infrastructure are common to most mobile communications licences and
raise maJor concerns.

_a)_ _Distortion_ _of_ _market structure resulting from current restrictions_

               - The requirement on most mobile operators to use the TO's leased line
capacity for both internal network connections (for example, base station
to mobile control centre) and the routing of long distance portion of calls

206

ties the mobile operator to the use of TO infrastructure without there
necessarily being any technical justification for such a restriction.

                - As interconnection charges and leased line rental represents 30% to
50%53 of mobile operator's revenue base, the TO supplying these
com1ections, usually on a monopoly basis, has considerable influence
over the commercial viability and cost structure of mobile operators, who
may or may not be its direct competitor. This concern is aggravated to
the extent that leased line tariffs are not yet generally cost-orientated and
in line with the Leased Line Directive54.

                - Restrictions on interconnection with other mobile networks, and
particularly, networks located in other Member States, act as barriers to
the provision of pan-European mobile services and trans-European
networks.

                - Finally, restrictions on self-provision of infrastructure constrain technical
progress, notably, because effective pan-European roaming for GSM
relies on the widespread availability of System 7 signalling - a technology
which has not yet been universally deployed by TO's within the European

um on.

Such restrictions are difficult to justify under current Union
telecommunications and competition rules, notably Article 90(2) EC. In
particular, the Services Directive, whilst allowing monopolies over the
physical telecommunications network and the basic voice service to continue,
specifically excluded mobile radiocommunications from its scope. It would
seem inconsistent with a narrow interpretation of the reserved services in that
directive to extend the scope of this monopoly to the provision of internal
infrastructure links for mobile radiocommunications systems and services.

Equally, the concern that international traffic would be diverted onto mobile
networks and ·away from the fixed network, removing the source of transfers
to uneconomic customers for the provision of universal service in the Union,
appears to be unfounded on the basis of current usage patterns and
experience in markets where such restrictions have been relaxed.

Under the Community competition rules Article 90 in combination with
Article 86 of the Treaty is infringed in situations where national regulation
prevents competitive provision of services, in circumstances, where the
monopoly provider of the same or a similar service is unable itself to meet
market demand for that service, or in doing so is inevitably led to favour its
ovvn offerings above those of its competitor [55 ] . In many Member States,
restrictions on the use of own or third party infrastructure is slowing down
the development of mobile services. It often also leads to the TO giving
preference to its own mobile operations in ten11S of location of access to the
public fixed network and in the availability of the links themselves.

53 Studies show in competitive mobile markets in the Community interconnection costs as a percentage or overall

revenue ranged from 30% to 50%.

54 Council Directive of 5 .lune 1992, OJ Ll65/27, 16.6.92

55 See Case.C-41/90, Hoffner & Elsner v. Macrotron, [1991] ECR 1-1979 and Case C-260/89, ERT v. Dimotiki

[ 19911 ECR 1-2925

207

Finally, a number of Member States have already given the right to use own
infrastructure to mobile operators. This has not produced a visible negative
impact on the incumbent operator.

_b)_ _Community principles concerning the use_ _of_ _infrastructure_

Mobile Network Operators should have full freedom to operate and develop
their network to carry out licensed or authorised activities. This includes the
freedom to choose over which facilities such services are offered.

The provision of facilities and the use of infrastructure fanning part of the
public fixed network must be subject to the general principles established
within the ONP Framework Directive, the Leased Lines Directive and the
proposed Voice Telephony Directive, namely, transparency, non- ·
discrimination and equality of access, as well as being fully consistent with
the Community competition rules.

In addition, mobile network operators should have full rights to establish and
use their own infrastructure or that owned or operated by thin:l parties for the
activities allowed by their licences.

Mobile network operators should have the right to directly interconnect with
other mobile operators either within the same Member State or in another
Member State. Direct connections should be permitted via the public fixed
network, own infrastructure or via infrastructure owned or operated by a
third party.

Where own infrastructure requires the availability of radio resources such as
links based on microwave transmission, Member States should make
available suitable radiofrequencies.

10.2 Access to sites and sharing of sites and infrastructure

The environmental priorities established in the EC Treaty suggest that the proliferation
of mobile communications services, as well as of technologies dependent on ever
smaller cells, should not be accompanied by an unnecessary proliferation of base

stations or radio masts.

Specific planning rules, the grant of rights of way and compulsory site purchase will
continue to be issues for national regulation.

Procedures to obtain access to sites should, however, be subject to the basic principles
of transparency, non-discrimination, and proportionality, and be based on objective
criteria.

At the same time, in order to minimise the environmental impact of the growth in
mobile conmmnications, regulatory restrictions which prevent the sharing of sites and
other infrastructure by mobile operators with each other and with fixed network
operators should be removed.

Mobile network operators should be allowed to share infrastructure, other facilities and
sites. subject to the application of the general principles of the ONP Framework
Directive. Site and infrastrncture sharing agreements must be transparent nondiscriminatory, 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

5 [7 ] In this context, the Commission has also published a Communication on devl'loping uni\'ersal SL'f"\"l(L' 111 ;1
(ompetitive environment. (Sec Communication of the Conunission of 15 November I l)t>J. _C(_ )i\'1( [1] >3) :'-I' 1. In

response. the Council adopted a Resolution on universal service at its meeting of 7 I k(L'mber I [1] J [1] l' 1 1,' k

published).

210

participating directly or indirectly in licence award procedures for the operation and
provision of mobile or personal communications services.

11.6 Union priorities in the area of licensing to prepare for the personal
communications environment

In addition, to the priority areas for action in the frequency field needed to promote the
evolution towards the personal communications environment, (identified at 4.4 above),
Member States in allocating licences should place particular emphasis on those
technologies most suited to providing the wireless parts of personal communications
services. The following priorities should be set for licensing:

         - Member States should allocate licences for operating mobile systems according to
the DCS-1800 standard and allow for the development of micro-cellular extensions
of the current mobile systems licensed according to the GSM standard in the 900

MHz bands.

         - Member States should plan towards allocation of frequencies and licensing of
satellite-based personal communication systems (including so called Low Earth
Orbit (LEO) systems) and of future third generation services based on the future
Universal Mobile Telecommunication System (UMTS).

12 ACCESS TO THIRD COUNTRIES

Union telecommunications policy has consistently supported the establislm1ent of a fair
international environment for both telecommunications services and equipment. This

was reaffirn1ed in Council Resolution 93/C2 l 3/0 I on the I 992 Telecoms Review.

which recognised "the establishment of a fair international trade enviro1m1ent allowing
access to third country telecommunications markets comparable to that existing in the
Community", as a key factor in the development of the future regulatory policy.

In this context account must be taken of the substantial participation in existing mobile
consortia within the European Union, of operators, from Third Countries, as well as
the strong position of Third Country manufacturers on the Union's mobile equipment
market (see Annex C).

At the same time, the current regulatory environment in overseas markets is
handicapping operators in the European Union from entering certain mobile markets
abroad. One example, is the provision in US legislation concerning the radio spectrum
restricting foreign ownership of more than 20% (directly) and 25% (indirectly) of a
US mobile operator.

Where such asynunetric market access currently exists, Community policy must
actively pursue the on-going multilateral negotiations on basic teleconununications
within the General Agreement on Trade in Services in order to open up foreign market

access.

Within the limits of its international commitments and Conmmnity law, the Union must
assess whether the current inequalities can be redressed within the framework of

211

Community legislation, for example, with regard to non-EU participation m mobik
licences58.

**13** **SATELLITE-BASED PERSONAL COMMUNICATIONS**

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 proposed directive on competition in the market for satcllik
conmmnications services and equipment, which when finally adopted \Yill extend th1..'
scope of the Services Directive to the satellite field63, and by a forthcoming
Conmmnication on access to space segment.

A key outstanding issue will remain, however, with regard to pan-European licensing.
As indicated in Am1exes A and B, satellite services impact by their nature a \\ 1dc
number of European countries and regulatory regimes, both in countries of uplink and
in the country(ies) of downlinking. The industry suffers significant costs from the need
to obtain regulatory clearance and/or licences from all Member States concerned. In
the proposal for a Council Directive on the mutual recognition of satellite sen ice
licenses a procedure has been elaborated allowing for mutual recognition of nalional
licenses, where tl}e common conditions of licences for a specific service have been
agreed at a Community level.

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

A similar requirement for national licensing of satellite-based Personal
Conmmnications Services could severely hamper their development. Licences for
satellite personal communications services should develop from the start in the Union
on the basis of single operating licences issued in a co-ordinated manner by the
Member States and/or at a Community level.

In addition, a co-ordinated European approach to licensing such services would be
more effective in preserving European regulatory interests with regard to global mobile
satellite systems.

It is therefore proposed that licenses for future satellite-based personal conmmnications
should be awarded ab initio in a coordinated manner and/or at Conmmnity level.

Such systems could also be given priority, in the field of mobile and personal
conununications, within the context provided by the Treaty for the establishment of
trans-European networks.

14 PROMOTING THE UNIVERSAL MOBILE TELECOMMUNICATIONS SYSTEM

(UMTS)

The future third generation UMTS system will ultimately provide an integrated
technology base for the most economic and efficient delivery of personal

conummications services.

Work within the European Union is advancing both within the frame\\'Ork of
Community research progranm1es, in particular, RACE and also within ETSI: whilst

outside the Union work within the ITU has focused on this field under the Future

Public Land Mobile Teleconmmnications Systems (FPLMTS) project (sec Annexes A
and C).

Within this future environment a smooth transition from second to third generation
technologies should be assisted by the fact that the future regulatory structures
proposed for the second generation technologies, such as GSM, DCS-1800 and DECT
and ERMES are designed to prepare the service environment in the Union for personal

communications.

If this approach were not be taken, it would not only undermine the twin goals of the
achievement of the internal market and the promotion of trans-European networks and
services, but also decisively restrict the potential of the Conununity's research
programmes and of the European standardisation work in the field of third generation
mobile systems, at a time when critical decisions are made at a global level on future
positions on UMTS/FPLMTS.

In order to maximise the potential of European initiatives in the field of Universal
Mobik Teleconmmnications Systems, a concentrated effort to support the evolution
towards the universal mobile teleconmmnication system is needed. This should include
as set out the development of coordinated licensing and award procedures between
Member States and/or at Community level.

213

Such licensing would have to take specific national situations into account, as \n~ll as
providing for a smooth transition from second to third generation services. The
eventual transition to third generation systems should be taken into account by the
Member States in the current licensing of second generation systems in order to ensure
that provision of personal communications services can continue on the basis of the
most efficient technologies.

At the same time, the European Radiocommunications Committee should be requested
to define, as a matter of urgency, in its follow-up and implementation of the decisions
taken at WARC 92, the firm allocation and scheduling of availability of U l\ffS
frequencies.

214

15 CONCLUSIONS

_Extension_ _of_ _Union's Telecommunications Policy to_ _the_ _Mobile sector is possible_ _and_
_provides a consistent framework_ _for_ _the_ _future_ _development_ _of_ _the_ _sector_ _and_ _its evolution_
_towards a personal communications environment._

The application of these principles implies a number of major changes in the sector:

_Aholishing remaining exclusive_ _and_ _special rights in_ _the_ _sector, subject where_ _re<1uired_ _to_
_tire establishment_ _of_ _appropriate licensing conditions._

Current approaches to licensing mobile services on the basis of exclusive and special
rights has had in many cases serious effects on the speed of development and
pc'netration of mobile communciations services. It also potentially limits the ability of

     - operators with specific experience in Member States' and other markets to tender on
equal tcnns for mobile operating licences.

_Remoral_ _of_ _all restrictions on_ _the_ _provision_ _of_ _mobile services both by independent_
_Sen·ice Providers_ _and_ _by direct service provision by mobile network operators._

This should include the freedom to offer a combination of services provided under
different mobile licences: as \vell as the ability to provide services in different Member
States. and the lifting of existing restrictions.

_Fullfi·eedomfor_ _mobile network operators to operate_ _and_ _develop their network"_ _for_ _the_
_purpose_ <~{the _activities_ _provided/or_ _in their licence or authorisation._

This should include the right to self-provide infrastructure for use in carrying out these
activities or to use third party infrastructure for that purpose, as well as the right to

share infrastmcturc.

Infrastructure and interco1mection costs currently represent between 30 and 50(1;> of
total revenues of mobile network operators, making much of their cost structure
dependent on the Tclcconununication Organisations, with whom they directly or
indirectly compete. Furthermore, the requirement to route traffic via the fixed net\\ ork
and prohibitions on din.:ct interconnection of mobile networks leads to less efficient
operation and may hamper innovative services, for example, where insufficient
signalling functionalities arc available in a particular fixed network.

In order to remove this dependence and to promote innovation, mobile systems should
be permitted to make use of own or third party infrastructure, and should be able to
connect directly to other mobile networks both within and between Member States.

_Unrestricted combined offering_ _of_ _services via_ _the_ _fixed_ _and_ _mobile networks within tire_
_mwall_ _time schedule set by Council Resolution_ _93/C219/0J_ _of_ _22_ _.lu(JJ_ _1993_ _for_ _the_ _fit/I_
_liberalisation_ _of_ _public voice telephony services via_ _the_ _fixed_ _network._

This would imply the right for mobile operators or independent Service Providers to
bid for resale licenses on the fixed network, as well as for the lifting of all existing
entry restrictions for fixed network operators in mobile markets, subject only to full
application of the Treaty competition rules, in particular_ Council Regulation
89/4064/EEC on the control of concentrations and the provisions of the Treaty
competition rules concerning abuse of dominant positions.

215

_The principles developed in the Union's approach to_ _mutual_ _recognition and licensing_
_shou_ _Id_ _be extended to the sector, where possible._ '

The application of these principles must take account of the specific features of the
sector. They should also in future promote a more European orientation. including the
creation of mechanisms for coordination and licensing procedures at a Community
level where appropriate in order to promote trans-European networks and services.

This should concern in particular satellite-based personal conununication services
(including Low Earth Orbit Satellite (LEOs) systems and the licensing of third
generation systems (Universal Mobile Teleconummication S \'stems
(UMTS/FPLMTS)).

_Mutual_ _recognition_ _of_ _type approval_ _of_ _mobile terminal equipment is critical and must_ _he_
_accelerated._

This includes the extension of Directive 91/263/EEC to cover mobile terminal

equipment not capable of connection to the public network, which is currently outside
its scope.

Accelerated application must include more rapid adoption of Common TechnicJI
Regulations (CTRs), in particular, for terminal equipment using new digitJl mobile
technologies. Accelerated application of Directive 91/263/EEC and 93/97/EEC should
also allow for mutual recognition of terminal equipment on the basis of fulfillment of
the essential requirements for those types of equipment for which CTRs hJvc still not
been adopted. Establishment of interim-tupe approval procedures in the context of the
European Radiocommunication Committee (ERC) should be encourJged in on.kr to
assist the achievement of the objectives of the Directives in this case.

_A coordinated Union approach to frequencies and numbering_ _must_ _he intens(fied_ _on_ _the_

_basis_ _of_ _the existing European framework._

This framework is linked to the European Radioconununications Con11nittcc (ERC)
and its associated European Radiocommunications Office (ERO) in the field of
radiofrequencies, and the European Committee for Regulatory Affairs (ECTRA) and
its future European Teleconununications Office (ETO) in the field of numbering.
following the principles of the respective Council Resolutions Jnd the Commission's
Conm1unication on a new approach to the co-ordination of rJdiofrcqucncics in th1..'
Conununity.

Memoranda of Understanding and framework contracts on cooperJtion shou Id be
concluded by the Conununity with these bodies, once a firm legal basis for such
cooperation has been created.

Clear priority areas for future work should be established. tJking account of bJsic
Union interests and need for full implementation in the Member States of agreements

rcJched within these bodies.

216

_111e_ _interconnection principles developed in Union Telecommunications Policy can be_
_extended to the mobile sector._

These should, however, be adjusted in the context of the overall adjustment of the
Conmmnity's regulatory framework up to 1 January 1996, in line with Council
Resolution 93/C2 l 3/08 of 22 July 1993 setting the schedule for full liberalisation of
public voice service.

This should be achieved within the context of the global review of the Open Network
Provision Framework.

_.._ \ 1 afe~r, _protection_ _of_ _privacy and environmental concerns should receive special attention_

Safeguarding the public interest within the sector is of fundamental importance for
European citizens, as well as a requirement of creating a stable conunercial

enviromnent.

This addresses in particular the concerns over user safety, as well as protection of

   - privacy and personal data within the new digital networks and systems. Priority must
also be given to tackling the enviromnental issues raised by a proliferation of mobile
systems which is important to ensure public acceptance of the future developments in
the sector and avoid the creation of new barriers within the internal market.

_Any_ _approach towards mobile and personal communications_ _must_ _be linked to the global_
_po/i91 goals_ _of_ _the European Union._

This concerns, in particular, the development of trans-European networks, promotion
of cohesion with the peripheral and less favoured regions, access to third country
markets and the policy of the European Union towards the countries of central and
Eastern Europe and at the international level.

Special attention should be given in this context to creating an envirom11ent conducive
to the achievement of the Conununity's research and technology development goals in
the area, in particular in the field of the future third generation system
(UMTS/FPLMTS) and satellite-based personal conmmnications (including Low Ea11h
Orbit Satellites. (LEOs).

217

_ACTE_ _(Approvals Committee_ _for_
_Terminal Equipment)_

_Allocation_ _(of_ _a frequency band)_

_AMPS_

_Analogue Cellular System_

_APC_ _(Aeronautical Public_
_Correspondence services)_

_Assignment_ _(of_ _a frequency band)_

_Auctioning_

_Avoidance_ _of_ _frequenc:v_
_interference_

_Cellular_ _!1,:vstems_

**GLOSSARY**

created by Directive 91/263/EEC, and, inter alia, responsible
for the adoption of the _Common Technical Regulations_
_(CTRs)_ on which EU harmonised type approval procedures

are based.

Entry in the Table of Frequency Allocations of a given
frequency band allowing the use of that band by one or more
radiocommunications services under specified conditions.
(see International Radio Regulations of the ITU; see also
_Assignment)_

_Advanced Mobile Phone System (AMPS),_ US _Analogue_
_Cellular System_ standard

Cellular system using analogue transmission techniques.
Standards used in Europe are inter alia _NMT. TACS,_
_Radiocom 2000,_ and _C-Net._

Generic term for radiocommunications based services.

allowing airline passengers to communicate from a plane
whilst in flight. Systems are being developed on the basis or
both satellite and terrestrial systems. Within Europe, the
_Terrestrial Flight Telecommunications_ _!1,:vstem_ (TF1~\). is
now entering into service with a number of airlines

of a radio frequency or a radio channel: authorisation given by
an administration for use of a particular radio frequency or
radio frequency channel, subject to specific conditions. Sec
Article 1 of the _Radio Regulations._

Licence or frequency award procedures, where allocation is to
the highest bidder. This method has been used in a number or
countries outside the European Union and has been used for
_GSM_ in Greece.

Measures undertaken to ensure that the use of a transmitting
device does not disturb receiving equipment to an extent
which would cause significant loss of information intended for
that receiver.

Mobile Radiocommunications networks, usually covering a
large area, in which the area of service is divided into a
number of smaller "cells" each having its own
transmitter/receiver equipment (base station). The use or cells
allows for the same frequency to be re-used in different cells.
thereby substantially increasing the maximum number of
subscribers within a given network. As subscribers moYe
from one cell to another, the cellular system automatically

reroutes the call or "hands on" to the base station in the next

cell, in order to enable continuous communications. Initial!~.
cellular systems were developed on the basis of analogue
transmission techniques (see _Analogue Cellular .\)·stem)._ but

218

_CEN/CENELEC_

_CEPT_

are increasingly swi-tchil}_g to digital transmission techniques
_(see Digital Cellular System)._

_European Committee_ _for_ _Standardisation_ and _European_
_Committee_ _for_ _Electrotechnical Standardisation,_ major
European standarization organisations. Responsible- inter alia
for the preparation of standards relating to electro-magnetic
compatibility under Directives 89/336/EEC and 92/31/EEC.

_European Conference_ _of_ _Postal and Telecommunications_
_Administrations._ Following recent reforms, membership of

CEPT is now confined to National Regulatory Authorities.
and encompasses the twelve EU Member States, and most
other European countries, including the countries of Central
and Eastern Europe.

Following these recent reforms, CEPT's activities are no\\
divided between _ECTRA_ (the European Committee for
Telecommunications Regulatory Affairs)~ the _ERC_ (the
European Radiocommunications. Committee) and CERP (the
European Committee for Postal Regulation) dealirig with
postal affairs (see also ECTRA and ERC).

_C-Net_ _Analogue_ _cellular system_ standard.

_Code Division Multiple Access (CDMA)_ Special coding technique for digital radio transmission
whereby information in digital form is combined with a
second coded digital stream to "smear" the information
simultaneously across a wide radio frequency band width. By
using a known coded signal at both transmitter and rcceiveL
the original information can be recovered at the receiver.
Currently used in some _Digital Cellular Systems_ on an
experimental basis (see also TDMA)

_Comparative Bidding_ Licence award procedure based on the review and com~arison
of the quality of the projects against defined criteria. This
method is widely used throughout the European Union.

_CT2_ Cordless telephony equipment standard based on an ETSI
interim standard. Current use primarily with _Telepoint_
_Applications._

_CT_ _Rs_ _Common Technical Regulations_ for type approval of terminal
equipment according to the procedures of Directive
91/263/EEC.

_/JCS 1800_ Standard for micro cellular communications systems
developed by _ETSI,_ building on the _GSM_ standard. also
referred to as PCN system standard. Such systems operate
with very small cells, varying in size between a few hundred
metres and a few kilometres.

_Digital Cellular_ _.._ _\)•stem_ _Cellular Systems,_ utilising digital (bit-based) transmission
techniques.

219

_Digital European Cordless_

_Telecommunications (DEC1)_

_Digital Short_ _Range_ _Radio_
_(DSRR)_

_DSI_

_El'TRA_

_Electromagnetic Compatibili(l'_
_(EMC)_

_Electromagnetic exposure_

_ENO_ - _European Numbering Office_

_ERC_ - _European_
_Radiocommu_ _11_ _ications Committee_

New digital cordless standard developed by _ETSI,_ supported
by Directive 91/288/EEC establishing harmonised frequency
bands for DECT and a Council Recommendation on its co
ordinated introduction.

New digital standard developed by _ETSI_ in the _Private_
_Mobile Radio (PMR)_ communications field, to be used over

short distances.

_Detailed Spectrum Investigations_ of radio usage, one of the
key tasks given the _European Radiocommunications Office._
aiming at the development of a common European Table of
Frequency Allocations.

The _European Committee_ _for_ _Telecommunications Regulatmy_
_Affairs (ECTRA),_ created as one of the three committees under
the new _CEPT_ structure. It currently includes three project
teams covering licensing, numbering and testing.
Council Resolution 92/C3 l 8/EEC of 19 November 1992 on

the promotion of co-operation on Europe-wide numbering.
identified several tasks for ECTRA in numbering coordination, 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 panEuropean dimension was created by the _ERC_ and started
operations in Copenhagen in May 1991.

_Essential requirements_ are non-economic reasons in the
general interest which may cause a Member State to restrict
access to the public telecommunications networks or public
telecommunications services.

_The European Telecommunications Office (ETO)_ is an office
which is being established under the umbrella of _ECTRA._

_European Telecommunications Standard._ Standards
established according to the procedures of the European
Telecommunications Standards Institute (ETSI).

The European standards organisation in the
Telecommunications field, having the task of producing
European Telecommunications Standards _(ETS),_ having
European-wide application and acceptance, in the area of
telecommunications.

_European Telecommunications Satellite Organisation,_ created
by the Eutelsat Convention and the related Operating
Agreement.

An _exclusive right_ exists where the operation of a mobile
network or the provision of a mobile service within a given
area is reserved by a Member State to a single public or
private operator. (See draft Commission Directive of l
December 1993 amending Directives 88/30 I/EEC and
90/388/EEC with regard to satellite communications).

Licence award procedure, where licences are awarded in order
of application, normally within the limits of the frequencies
available. This method is used extensively for private mobile
radio systems and satellite services.

221

_Frequency Division Multiple Access_
_(FDMA)_

_Future Public_ _Land_ _Mobile_

_Telecommunications System_
_(FPLMTS)_

_GPS_

_Global_ ~:vstemfor _Mobile_

_communications (GSM)_

_Green Paper(s)_

_Hertz_

_Inmarsat_

_Intelligent Networks (IN)_

_INTEL..\.'A_ _T_

_/TA (Interim_ _1)'jJe_ _Approval)_

_IP_ _Rs_

Special coding technique used for both digital and analogue
radio transmission in which individual calls are connected by
the assignment of a specific communications channel. The
channel selected is maintained only for the duration of the call
and is taken from a basket of many channels, which together
make up the bandwidth of the radio frequency (-ies) set aside
for that service.

See _UMTS (Universal Mobile Telecommunications_ ~)1ste111.'i)

_Global Positioning System._ Satellite system used, inter alia.
for maritime, air and terrestrial navigation providing
extremely accurate location and positioning information for
ships, planes, vehicles or individuals throughout the world
that carry a _GPS_ receiver.

The central standard, developed by _ETSI,_ for digital (2nd
generation) mobile systems, using _TDMA (Time Division_
_Multiple Access)_ techniques. _GSM_ has been supported by
Directive 87/372/EEC establishing harmonised frequency
bands for _GSM_ and a Council Recommendation and

Resolution on its co-ordinated introduction. The system
supports _Roaming,_ and a broad range of features.

_Green Papers,_ in the European Union context, are European
Commission consultative documents setting out basic policy
goals for public debate. Key _Green Papers_ issued in the
telecommunications sector, are the _1987_ _Green Paper_ _on_ _the_
_development_ _of_ _a common market_ _for_ _teleco111111unications_
_services and equipment (COM_ _(87) 290)_ _and_ the _1990 Green_
_Paper on satellite communications_ (COM (90) 490).

1 cycle/second, measurement unit for radio frequencies. l kH1.
corresponds to 1000 Hz~ 1 MHz corresponds to 1 million Hz~

1 GHz corresponds to 1 billion Hz (1000 MHz).

The _International Maritime Satellite Organisation._
established by the INMARSA T Convention and the related
operating agreement.

Advanced network concept allowing the provision of services
such as call forwarding, calling line identification and other
advanced functions such as flexible routing. IN functional it~
will be a vital component in the evolution of _Universal_
_Personal Telecommunications (UPT)._

The _International Satellite Organisation,_ established by the
INTELSAT Convention and the related Operating
Agreement.

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

_Intellectual Property Rights_

222

_International Telecommunications_

_Union (ITU)_

_Low_ _Earth Orbiting satellite (LEOs)_
,

_Lottery_

_Memorandum_ _of_ _Understanding (MOU)_

_Micro Cellular Networks_

_Mobile Data_

_Mobile Nehvork Operator_

_NMT_

_NRA_

_ONP_

_International Telecommunications Union (ITU),_ the United
Nations specialised agency for telecommunications.

The structure of the ITU has recently been reviewed to adapt it
to the changing information and telecommunications
environment. Formal changes were agreed at an Additional
Plenipotentiary Conference in December 1992 and came into
operation in March 1993. These have separated the ITU into
three sectors: Standardisation, Radiocommunications and
Development.

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

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

MoUs in the telecommunications field in Europe have been
entered into between operators and/or equipment
manufacturers or other market participants for the roll out of
new products and services. Within the mobile sector. MoUs
have been entered inter alia for _GSM, ERMES,_ _TFTS_ and
_Telepoint._

_Cellular Systems_ where normal-sized cells in the cellular
mobile radio network are split into very small geographical
areas of between a few hundred metres up to a few killometrcs
("micro-cells"). This technique confers higher network
capacities, lower power transmitters, higher frequency
efficiency through greater frequency re-use and longer airtime (or lighter handsets) for a given battery technology.

Specific radio-based communications services for numeric and
alphanumeric data transmission. Such services are currently
used primarily for closed user group applications, through for
example, remote datebase access or data/ E-mail transfer
between portable computers and a home network.

Operator of mobile network infrastructure, supporting the
transmission and provision of radio-communications services.
The activities of _Mobile Network Operators_ in most cases also
integrate mobile _Service Provider_ functions (direct service
provision to end-users) within their overall business.

_Nordic Mobile Telephone,_ _Analogue_ _Cellular System_
standard.

_National Regulatory Authority._ Directive 88/30 l and 90/188
both require Member States to ensure the separation of
regulatory activities from the operation and provision of
services by _Telecommunications Organisations._

The _Open Network Provision_ concept defined in Council
Directive 90/387 /EEC. .

223

_Paging_

_PCS_ - _Personal Communications_

_Services_

_PDAs (Personal Digital Assistants)_

_PDC_

_Personal_ _and_ _portable numbers_

_Personal Communications Networks_

_(PCN!))_

_PIN_ _(Personal Identification Number)_

_Private Mobile Radio (PMR)_

_Public Access Mobile Radio (PAMR)_

Radiocommunications based service involving non-speech.
one-way, personal selective calling with a tone, vibration or
visual alert. The system may either simply inform the user
that somebody is trying to contact him or her or may also
carry a numeric or alphanumeric message.

_Personal Communications Services (PCS)_ is used as a generic
term for services which provide person-to-person calling,
independent of location, terminal used, the means of
transmission (wired or wireless) and/or the choice of
technology.

Portable computer-based and often hand-held devices
combining a wide range of functions, such as diary, address
book, word processor, calculator, etc. and which may support
radio-based links for data transmission and/or to Local Arca

Networks.

_Personal Digital Cellular,_ Japanese mobile digital standard.
which has been developed in parallel with the _Personal_
_Handy Phone (PHP)_ standard (similar to a two-way _Telepoint_
_Application)_ and the _N-Star Mobile Satellite s:vstem._

_Personal_ _and_ _portable numbers_ are numbers which are to be
independent of network, service provider, location and
terminal used, in contrast to current numbering which is
country, network and operator specific.

Such personal numbers would be of general application (and
therefore portable) across mobile and fixed network services.
providing full personal mobility and therefore a key clement
in _Universal Personal Telecommunications (UP1J._

see _DCS-1800_ systems.

used in _GSM_ and other subscriber card-based systems to
ascertain identity of subscribers and check authorization of

access.

Private radio communications system, usually operating on a
local or regional basis from a single _base station_ and using a
single or small number of radio channels. Users normally
have to wait until a channel is clear before they can use it, as
the base station can only communicate with individual
mobiles. Larger users may manage many mobiles from a
single base station (for example, taxi firms). Communication
is generally limited to a single (closed user) group.

_PAMR_ provides shared use of a common radio
communications system for activities similar to _Private_
_Mobile Radio._ By providing for shared use, _PAMR_ can
make more efficient use of the frequencies available by
allocating conversations to free channels within a group or
channels available. (See also _TETRA)_

224

_Public Service Requirements in_ _the_
_form_ _of_ _Trade Regulations_

_RAC'E-_ _R&JJ programme in_
_advanced communications_

_technologies_ _for_ _Europe_

_Radiocom 2000_

_RES_ _(Radio Equipment and Systems)_
_Committee_

_Roaming_

_RTT_ _(Road Transport Telematics)_

_Satellite-based Personal_

_Communications Services_

_Second Generation Mobile Systems_

_Service Providers_

Category of licensing conditions aimed at ensuring
permanence, availability ~nd quality of services.

The current phase of the RACE programme is defined in
Council Decision 91/352/EEC of 7 June 1991 adopting a
specific research and technological development programme
in the field of telecommunications technologies ( 1990 to
1994) . Within the Mobile and Personal Communications
line, a number of projects participate in the work towards
third generation mobile systems (UMTS & MBS). These
include MONET, ATDMA, CODIT, MBS, SAINT,

TSUNAMI and PLATON.

A number of other R&D projects in the RACE framework also
contribute towards the definition of UMT/MBS namely.
MA VT, MOBILE, MODAL and MOEBIUS.

_Analogue Cellular System_ standard

_ETSI_ Technical Committee (TC), with broad responsibilities
in the field of radiocommunications equipment and systems

Facility, supported by commercial arrangements between
operators and/or service providers, which enables a subscriber
to use his/her radio telephone equipment on any other network
which has entered into a roaming agreement in the same or
another country for both outgoing and incoming calls.

A range of programmes, aimed at developing the radio-based
technology to provide road users with up to date information
(traffic conditions, route guidance, etc.) and to support traffic
management and control.. Particular, examples of these
projects are the EU-programme _DRIVE_ - _Dedicated_ _Road_
_Infrastructure_ _for_ _Vehicle Safety in Europe,_ and within the
EUREKA programme - _PROMETHEUS._

Radiocommunications-based services, where there is a direct
communication from hand held equipment to satellites.
though potentially routed through terrestrial-based
infrastructure for a portion of specific connections.

These new services will be based on new technologies. whose
_frequency allocations_ were agreed at W ARC 92 (for example.
_Low_ _Earth Orbiting Satellite systems)._

A generic term encompassing digital mobile nel\vorks and
technology currently being deployed. It includes, inter alia.
_GSM,_ _DCS_ _1800,_ _ERMES,_ _DECT, TETRA, TFTS, DSRR._

_Service providers_ offer services to end users involving the use
of mobile networks and services. The role of service

providers may vary between that of airtime reseller to the
provision of sophisticated value added services. Service
providers may be independent or form part of a mobile
network operation.

225

_SES_ _(Satellite Earth Station)_
_Committee_

_Signalling System_ 7 _(SS7)_

_SMG_ _(Special Mobile Group)_

_Special Rights_

_Subscriber Identification Module_
_(SIM)_ .

_TACS_

_Time Division Multiple Access_
_(TDMA)_

_1992 Telecoms Review_

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

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

_ETSI_ Technical Committee (TC), with special responsibility
for _GSM,_ _DCS_ _1800,_ and the development of UMTS.

A _special right_ exists where a Member State wjthin a given
area designates, other than according to objective,
proportional, transparent and non-discriminatory criteria,
several competing undertakings or limits the number other
than according to such criteria or grants one or more of these
undertakings a lasting particular advantage other than those
advantages referred to in Article 92 of the EEC Treaty.
(See draft Commission Directive of 1 December 1993
amending Directives 88/301/EEC and 90/388/EEC with
regard to sat~llite communications - see also _Exclusive_
_Rights)_

A plastic card containing a microprocessor and memory
issued for use with _GSM_ and _DCS_ _1800_ networks. The card

contains details of the subscriber: the subscribers services
(those to which he is entitled) and personal telephone
directories. Only through the use of a legitimate card, can a
user enable a piece of equipment for use on the network.

_Total Access Communications,_ an _Analogue_ _Cellular System_
standard

Special coding technique for digital radio transmission
whereby information in digital form is packaged and
transmitted during pre-arranged time periods, the total
number of active users having one time slot for each "frame"
or repetition period. The packaged information is rearranged
so that speech and data appears continuous. _TDMA_ is the
transmission technique used inter alia for the _GSM_ system.

A review and wide public consultation during 1992 and early
1993 led to the adoption by the EU Council of Ministers of
Resolution C93/213/01of22 July 1993, providing for the
liberalisation, of the provision of public voice telephony
services by 1 January 1998, subject to additional transitional
periods of up to _5_ years for Greece, Ireland, Portugal and
Spain, and a possible delay of up to 2000 for Luxembourg.
The Resolution also requested the publication of a _Green_
_Paper_ on mobile and personal communications, and the
production of a _Green Paper_ on telecommunications
infrastructures and cable TV by 1 January 1995. The Council
also requested that the necessary regulatory framework for the
1998 liberalisation deadline be prepared by 1 January 1996.

226

_Telepoint Applications_

_Terminal Identification (The_ _EIN_ _Equipment Identification Number)_

_The Terrestrial Flight Telephone_
_System (TFTS)_

_Third Generation Systems_

_TO_ _(Telecommunications_
_Organisation)_

_Trans European Trunked Radio_
_(TETRA)_

_Universal Mobile Telecommunications_

_System (UMTS)_

_Universal Personal_

_Telecommunications (UPT)_

Generic tenn for applications allowing subscribers over a
wireless link between a handset or other radiocommunications

device to place calls via the public network infrastructure, but
not generally to receive calls.

Standards currently used for these applications include in
particular _CT2_ and, in future, _DECT._

Each piece of _GSM_ mobile or transportable equipment (the
terminal) has certain information programmed during
manufacture which can be used to uniquely identify the unit
and which the network uses to track stolen equipment and to
disable in the event of certain malfunctions.

A digital _APC_ standard developed by _ETSI_ and now entering
into service with a number of airlines. The system comprises
airborne equipment and a series of ground stations through
which telephone calls can be initiated by users whilst in flight.

See entry on _UMTS._

_Telecommunications Organisations_ as defined in Directive
90/3 88/EEC means public or private bodies to which Member
States grant special or exclusive rights for the provision of a
public telecommunications network and, when applicable,

service

Digital trunked mobile _PAMR_ standard being developed by
_ETSL TETRA_ is a mobile communications system to be used
for applications on a shared basis, such as by closed user

groups.

A technology and standard for third generation mobile digital
systems, currently under development within _ETSI_ and by the
_RACE_ programme. _UMTS_ should support full personal
communications services, delivered over a combination of

fixed and mobile networks.

Work in the framework of the ITU in this field is carried out

under Future Public Land Mobile Telecommunications

System (FPLMTS).

Concept which should allow person-to-person calling across
multiple networks at any terminal, fixed or mobile and
irrespective of geographical location, based on personal and
portable numbers. Essential concept for implementing full
personal mobility in a communications environment.

227

_Wireless_ _Local_ _Area_ _Networks_ _and_

_Wireless_ _PBX's_

_·Wireless_ _Local_ _Loop_

_World Administrative Radio_

_Conferences_ - _WARC'_ _92_

Private mobile communications system providing local area
networking; where cabled connections between or within sites
are replaced by radio links; a _HiperLan_ system specified by
_ETSI_ refers to radiocommunications sub-systems intended to
provide high speed, short distance links between computer

systems.

_Wireless Public Branch exchanges (PBXs)_ are telephone
switching systems typically in customer premises providing
radio-based links between subscriber equipment, private
mobile communications systems and/or the public network.

The addition of a radio link to a fixed network in order to

provide a wireless connection for part or all of the local loop
(for example, between the curb and the home). (See also
_DEC1)_

_The World (Administrative) Radio Conferences (WARCs)_ are
global meetings within the framework of the _ITU._ Following
the recent changes in ITU, these meetings are now referred to
as World Radio Conferences (WRCs).

W ARC '92 produced a number of agreements concerning
mobile and other, more specific allocations at both lower and
higher frequencies. These changes, will in time, permit wider
use of the band 1-3 GHz for mobile services, both terrestrial

and satellite based .

. ·                      - ?-1

ISSN 0254-1475

COM(94) 145 final

DOCUMENTS

EN 15

Catalogue number : CB-C0-94-179-EN-C

ISBN 92- 77-67896-8

Office for Official Publications of the European Communities

L-2985 Luxembourg