May 27, 2010, 10:35 AM ET.
European Commission Targets ‘Digital Virgins’
By John W. Miller
The European Commission last week announced a plan to expand broadband access to all European Union citizens by 2013. In commissioner Neelie Kroes’s words, the goal is to reach out to people she calls “digital virgins.”
Europe’s broadband penetration rate is still only 25%, 30% of Europeans have never used the Web, and only 1% of Europeans have ever used a fiberoptic connection, compared to 12% of Japanese and 15% of South Koreans.
The biggest problem faced by the EU’s telecom economy is that it’s still made up of 27 separate countries, run by 27 national regulators with varying degrees of power. Many countries still allow local monopolies to carve up markets, keeping prices artificially high.
The European Competitive Telecommunications Association, which represents the industry in Brussels, is weighing in with its annual survey of 110 questions for 19 EU countries as well as Norway, Switzerland and Turkey. It’ll be published and sent to the European Parliament on June 1.
Its findings show that many EU countries still make it hard for foreign or start-up telecom companies to sell their services. The freest telecom economies are Netherlands, the U.K., Denmark, Norway, France, and Ireland. The worst are Turkey, Switzerland, the Czech Republic and Bulgaria.
The differences cited in the study are striking. It takes 23 days to change telephone services in Poland, compared to one in Ireland. An average use of mobile services costs €10 in the Netherlands, the cheapest, and €36 in Spain. Basic broadband costs €17 a month in the Netherlands, €19 in the U.K., €61 in Portugal, and €63 in Germany. “The German market is a non-competitive market dominated by Deutsche Telekom,” says ECTA’s Erzsebet Fitori.